Theo and Addy are deciding what toys to pick out at the toy store. Depending on what toys they pick, they can play different games together, but they can’t coordinate their choices. They can’t talk to one another at all until after that make their choice. Below is their payout matrix which shows their utility for each choice. All the bold figures are for Theo and all the non bold figures are for Addy. Addy Strategies Theo Strategies Toy Gas Pump Jump Rope Toy food 20 10 10 3 Ball 7 3 9 4 a) If Theo chooses Toy Food, what would be the possible outcomes for Addy? What would be best for Addy? b) If Addy chose a Toy Gas Pump, what are the possible outcomes for Theo? What would be best for Theo? c) Does Addy have a dominant strategy? If yes, what is her strategy? If not how can you tell? d) Does Theo have a dominant strategy? If yes, what is her strategy? If not how can you tell? e) Is there a Nash equilibrium? If yes, what would it be and why is it a Nash Equilibrium? if not explain your answer.
- Theo and Addy are deciding what toys to pick out at the toy store. Depending on what toys they pick, they can play different games together, but they can’t coordinate their choices. They can’t talk to one another at all until after that make their choice.
Below is their payout matrix which shows their utility for each choice. All the bold figures are for Theo and all the non bold figures are for Addy.
|
Addy Strategies |
|||
|
Theo Strategies |
Toy Gas Pump |
Jump Rope |
|
Toy food |
20 10 |
10 3 |
|
|
Ball |
7 3 |
9 4 |
a) If Theo chooses Toy Food, what would be the possible outcomes for Addy? What would be best for Addy?
b) If Addy chose a Toy Gas Pump, what are the possible outcomes for Theo? What would be best for Theo?
c) Does Addy have a dominant strategy? If yes, what is her strategy? If not how can you tell?
d) Does Theo have a dominant strategy? If yes, what is her strategy? If not how can you tell?
e) Is there a Nash equilibrium? If yes, what would it be and why is it a Nash Equilibrium? if not explain your answer.
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