6. Solving for dominant strategies and the Nash equilibrium Suppose Gabriel and Nia are playing a game that requires both to simultaneously choose an action: Up or Down. The payoff matrix that follows shows the earnings of each person as a function of both of their choices. For example, the upper-right cell shows that if Gabriel chooses Up and Nia chooses Down, Gabriel will receive a payoff of 6 and Nia will receive a payoff of 3. Gabriel Up Down Up 6.6 4,3 Nia Down 6,3 5,5 In this game, the only dominant strategy is for to choose Down Up The outcome reflecting the unique Nash equilibrium in this game is as follows: Gabriel chooses and Nia chooses
6. Solving for dominant strategies and the Nash equilibrium Suppose Gabriel and Nia are playing a game that requires both to simultaneously choose an action: Up or Down. The payoff matrix that follows shows the earnings of each person as a function of both of their choices. For example, the upper-right cell shows that if Gabriel chooses Up and Nia chooses Down, Gabriel will receive a payoff of 6 and Nia will receive a payoff of 3. Gabriel Up Down Up 6.6 4,3 Nia Down 6,3 5,5 In this game, the only dominant strategy is for to choose Down Up The outcome reflecting the unique Nash equilibrium in this game is as follows: Gabriel chooses and Nia chooses
Chapter15: Oligopoly And Strategic Behavior
Section: Chapter Questions
Problem 17P
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