On Friday night, Elton and his partner Rodney are deciding where to go for dinne
ID: 1169034 • Letter: O
Question
On Friday night, Elton and his partner Rodney are deciding where to go for dinner. The choices are Indian, Korean, and Mexican. Elton most likes Indian food and most dislikes Mexican food, whereas Mexican is Rodney’s favorite and Indian is his least favorite. Each cares about the food but also about dining together. As long as the food is Indian or Korean, Elton prefers to go to the restaurant he thinks Rodney will choose. However, he abhors Mexican food and would choose to dine alone at either the Indian or the Korean restaurant rather than joining Rodney at the Mexican place. As long as the food is Mexican or Korean, Rodney will decide to go where he thinks Elton will choose. However, Rodney is allergic to some of the Indian spices and prefers dining alone to eating Indian food. Both of them are at their separate workplaces and must simultaneously decide on a restaurant. Find all Nash equilibria.
Explanation / Answer
Payoff Table
Indian
Korean
Maxican
Elton
dine
dine
Not dine
Rodney
Not dine
dine
dine
Case 1: If Elton choose Indian, Rodney will not dine with him, If he chooses Korean They both can dine together
Case 2: If Rodney choose Maxican, Elton will not dine with him, If he chooses Korean They both can dine together
Thus Nash Equilibrium for both of the is to choose Korean, so that both can dine together
Indian
Korean
Maxican
Elton
dine
dine
Not dine
Rodney
Not dine
dine
dine
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