2.market structures 2.market structures 2.market structures 2.market structures

Question

2.market structures 2.market structures 2.market structures 2.market structures 2.market structures 2.market structures 6. Solving for dominant strategies and the Nash equilibrium Suppose Felix and Janet 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 Felix chooses Right and Janet chooses Right, Felix will receive a payoff of 5 and Janet will receive a payoff of 1. Janet Left Right Left 4,4 6, Felix Right The only dominant strategy in this game is for to choose- The outcome reflecting the unique Nash equilibrium in this game is as follows: Felix chooses and Janet chooses

Explanation / Answer

The only dominant strategy in this game is for Felix to choose left. Because 4>2 and 6>5

When Felix chooses left, Janet chooses right as 7>4

When Felix chooses right, Janet chooses left as 4>1

When janet chooses left, Felix chooses left as 4>2

When janet chooses right, Felix chooses left as 6>5

So nash equilibrium = Felix chooses left and Janet chooses right

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.