Two Logging Companies Are Deciding Whether or Not to Cut

Multiple Choice

Two logging companies are deciding whether or not to cut down a significant portion of a particular forest that both have access too. Both companies understand the environmental consequences of their actions, knowing that they are trading off higher profits for a better outcome from society's point of view. The payoffs facing these companies are given in the table below.

From the table, we know that the outcome of this game will beneither Company choosing to cut the forest

A) Company 1 choosing to cut, Company 2 choosing not to cut
B) Company 2 choosing to cut, Company 1 choosing not to cut
C) both companies choosing to cut the forest