Suppose that two players are playing the following game. Player A can choose eit

Question

Suppose that two players are playing the following game. Player A can choose either Top or Bottom, and Player B can choose either Left or Right. The payoffs are given in the following table where the number on the left is the payoff to Player A, and the number on the right is the payoff to Player B. Does Player A have a dominant strategy? If so, what is it? Top is a dominant strategy for Player A Bottom is a dominant strategy for Player A Both of the above None of the above Does Player B have a dominant strategy? If so, what is it? Left is a dominant strategy for Player B Right is a dominant strategy for Player B Both of the above None of the above For the next four questions, you'll be asked whether a strategy combination is a Nash equilibrium or not. Player A plays Top and Player B plays Left This is a Nash equilibrium This is NOT a Nash equilibrium Player A plays Bottom and Player B plays Left This is a Nash equilibrium This is NOT a Nash equilibrium Player A plays Top and Player B plays Right This is a Nash equilibrium This is NOT a Nash equilibrium

Explanation / Answer

Whatever B choses, A choses Bottom, Answer B is correct.

B Doesnt have a dominant strategy. Because his decision depends on A.

Nash equilibrium is 3,8.

A choses Top, then B choses Left (5)

A choses Bottom, then B choses Right (8)

B choses Left, then A choses Bottom (5)

B choses Right, then A choses Bottom (3).

In the above combinations, only 3,8 belong to a single outcome i.e. nash equilibrium.

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