To choose: Based on the payoff matrix, the true option.
Answer to Problem 5MCQ
Correct option is C i.e., Both Person R and Person J have a dominant strategy.
Explanation of Solution
As per the payoff matrix given, Person J will confess whether or not Person R confesses if Person J confesses, he will get a 2-year sentence when Person R doesn’t confess, Person R will get a 20-year sentence. So, here the benefit of confessing is more than that of not confessing.
In case Person J does not confess and Person R also does not confess both will get an equal sentence of 5year.
In case Person R confesses and Person J does not confess: Person J gets a 20-year sentence and Person R gets only 2 years sentence.
Finally, if both of them confess: both will get an equal sentence of 15 years.
So, considering all the above scenarios both Person J and Person R have a dominant strategy.
Introduction:
Dominant strategy: As per the
A Nash equilibrium defines the optimal state of the game when both players take optimal actions but now take into consideration the actions of their opponent.
Chapter 65 Solutions
Krugman's Economics For The Ap® Course
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