Harrison and Tyler are two students who met by chance the last day of exams befo

Question

Harrison and Tyler are two students who met by chance the last day of exams before the end of the spring semester and the beginning of summer. Fortunately, they liked each other very' much. Unfortunately, they forgot to exchange addresses. Fortunately, each remembers that they spoke of attending a campus party that night. Unfortunately, there are two such parties. One party is small. If each attends this party, they will certainly meet. The other party is huge. If each attends this one, there is a chance they will not meet because of the crowd. Of course, they will certainly not meet if they attend separate parties. Payoffs to each depending on the combined choice of parties are shown below, with Tyler's payoffs listed first. What is Nash Equilibrium (NE)? Identify the NE in this game. Use your argument to verify- that they are NE. Use your argument to verify that other strategy combinations are not NE.

Explanation / Answer

dominant strategy of this game is (1000,1000) because each will choose the small party irrespective of other as indivisual payoff is maximum.

NE- when Tyler chooses small party, Harrison has to choose between 1000,0. so he chooses 1000. in other way if Harrison chooses small party, Tyler has to choose between 1000,0. so he chooses 1000. so (1000,1000) is one NE.

similarly if Tyler chooses large party harrison has to make decision among 0, 500. so he chooses 500. in other way when Harrison chooses large party, Tyler has to choose between 0,500. so he chooses 500. so (500,500) is other NE

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