Consider the network scheduling profit matrix. Can cheap talk help the networks

Question

Consider the network scheduling profit matrix. Can cheap talk help the networks settle on a single equilibrium? Why or why not? Network1 Cheap talk Wednesdayhrsday 0 A. can help the networks settle on a single equilibrium because the networks have an incentive to be truthful - 50 75 O B. cannot help the networks settle on a single Wednesday equilibrium because the communication occurs after the networks have made their 50 50 scheduling choices Network 2 ( C. can help the networks settle on a single 60 - 50 equilibrium because the communication can change the payoffs Thursday D. cannot help the networks settle on a single 60 - 50 equilibrium because the networks have dominant strategies E. can help the networks settle on a single equilibrium because the networks can use the communcation to make binding agreements

Explanation / Answer

Given network 1 chooses Wednesday, network is better off choosing thrusday. Given network 1 chooses thrusday network 1 chooses Wednesday. Given network 2 chooses Wednesday network 1 chooses thrusday. Given network 2 chooses thrusday network 1 chooses Wednesday. Thus there are 2 Nash equilibrium. However a single equilibrium is not possible in this case. (B)

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