Two division rival Cricket teams, The Bombers and The Dolphins are trying to decide whether or not they should commit recruiting violations to obtain better players for their cricket teams. They are both nervous since, if they get caught, the Cricket League Officials will impose a fine on the team for violating recruiting policy. Suppose:
Bombers and Dolphins have evenly matched cricket teams.
The team which commits the recruiting violations will get all of the best players and thus be guaranteed to win the regular season rivalry game.
If both schools commit recruiting violations then the players will be divided equally between the two teams, thus making them evenly matched.
If both schools do not commit recruiting violations then the players will be divided equally between the two teams and they will be evenly matched.
Both schools decide simultaneously and it is a one shot game. Furthermore, suppose the following specific conditions are in place:
The payoff for winning both games is $20.
The probability of being caught is 0.1
The fine for being caught is $90
This game with these specific conditions is a Prisoner's Dilemma Game
True or False