Scenario: Tom and Harry Are Participating in a Game in Which

Multiple Choice

Scenario: Tom and Harry are participating in a game in which the participants are divided into groups of two. Tom and Harry have been put in the same group. In each round of the game, Tom will be given an item. Tom can either give it to Harry or pass it on to the next team. If he decides to pass it on to the next team, neither of them will get the prize. If he gives it to Harry, Harry can either pass it on to the next team or sell it himself. If he passes it on to the next team, each of them will get $100. However, if he decides to sell it, he will get an amount higher than $100 and Tom will get nothing.
-Refer to the scenario above.Which of the following will happen in equilibrium if the game is played only once?

A) Social surplus will be maximized.
B) Tom will trust Harry, and Harry will defect.
C) Tom will trust Harry, and Harry will cooperate.
D) Neither of them will make any money.