Suppose Rashard and Alyssa are playing a game that requires both to simultaneously choose an action: Up or Down. The payoff matrix that follows shows the earnings of each person as a function of both of their choices. For example, the upper-right cell shows that if Rashard chooses Up and Alyssa chooses Down, Rashard will receive a payoff of 4 and Alyssa will receive a payoff of 5. Alyssa Up Down Rashard Up 8, 4 4, 5 Down 5, 4 6, 5
Suppose Rashard and Alyssa are playing a game that requires both to simultaneously choose an action: Up or Down. The payoff matrix that follows shows the earnings of each person as a function of both of their choices. For example, the upper-right cell shows that if Rashard chooses Up and Alyssa chooses Down, Rashard will receive a payoff of 4 and Alyssa will receive a payoff of 5. Alyssa Up Down Rashard Up 8, 4 4, 5 Down 5, 4 6, 5
Chapter15: Oligopoly And Strategic Behavior
Section: Chapter Questions
Problem 17P
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Suppose Rashard and Alyssa are playing a game that requires both to simultaneously choose an action: Up or Down. The payoff matrix that follows shows the earnings of each person as a function of both of their choices. For example, the upper-right cell shows that if Rashard chooses Up and Alyssa chooses Down, Rashard will receive a payoff of 4 and Alyssa will receive a payoff of 5.
| Alyssa | |||
| Up | Down | ||
| Rashard | Up | 8, 4 | 4, 5 |
| Down | 5, 4 | 6, 5 |
In this game, the only dominant strategy is for to choose .
The outcome reflecting the unique Nash equilibrium in this game is as follows: Rashard chooses and Alyssa chooses.
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