Suppose Alex and Becky are playing a game in which both must simultaneously choo

Question

Suppose Alex and Becky 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 Alex chooses Right and Becky chooses Right, Alex will receive a payoff of 4 and Becky will receive a payoff of 6.

The only dominant strategy in this game is for _____________ (Becky/Alex) to choose ________ (Left/Right)    .(Choose one for each blank)

The outcome reflecting the unique Nash equilibrium in this game is as follows: Alex chooses ________ (left/right) and Becky chooses ______ (Left/right) .

Explanation / Answer

Answer.)

1.) The only dominant strategy in this game is for ALEX to choose RIGHT.

A strategy is a dominant strategy for a player if it yields the best payoff (for that player) no matter what strategies the other players choose. Note ALEX gets a higher combined payoff of 10 by choosing RIGHT over combined payoff of 4 from choosing LEFT. For Becky, both strategies are giving same combined payoff, therefore, no dominant strategy for Becky.

2.) The outcome reflecting the unique Nash equilibrium in this game is as follows: Alex chooses RIGHT and Becky chooses LEFT.

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