Suppose Carlos and Deborah are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Carlos chooses Right and Deborah chooses Right, Carlos will receive a payoff of 7 and Deborah will receive a payoff of 6.

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter13: Positive Externalities And Public Goods
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Suppose Carlos and Deborah are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Carlos chooses Right and Deborah chooses Right, Carlos will receive a payoff of 7 and Deborah will receive a payoff of 6.
 
 
 
 
 
The only dominant strategy in this game is for ____  to choose ____   .
 
The outcome reflecting the unique Nash equilibrium in this game is as follows: Carlos chooses  ____  and Deborah chooses ____   .
Deborah
Left
Right
Left
4, 3
6, 4
Carlos
Right
6, 7
7, 6
Transcribed Image Text:Deborah Left Right Left 4, 3 6, 4 Carlos Right 6, 7 7, 6
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