3. Solving for dominant strategies and the Nash equilibrium Suppose Andrew and B

Question

3. Solving for dominant strategies and the Nash equilibrium Suppose Andrew and Beth 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 Andrew chooses Right and Beth chooses Right, Andrew will receive a payoff of 5 and Beth will receive a payoff of 5 Beth Left Right Left 6,6 6,3 Right 4,3 5,5 Andrew The only dominant strategy in this game is for to choose The outcome reflecting the unique Nash equilibrium in this game is as follows: Andrew chooses

Explanation / Answer

1. The only dominant strategy in this game is for Andrew to choose Left.
If Beth chooses left, it is actually Andrew's best strategy but if Beth chooses right, Andrew's best strategy remains constant. Whereas, if Andrew chooses left, Beth's best strategy is to choose the same but if Andrew chooses right, it is the best strategy for Beth to choose right. Thus, Beth does not has the dominant strategy while Andrew has it by choosing left.

2. The outcome reflecting the unique Nash equilibrium in this game is as follows: Andrew chooses Left and Beth chooses Left.

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