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In a two player, one shot simultaneous move game each player can select strategy A or B. If both players select strategy A, each receives a payoff of $500. If both pick B, they get $100 each. If player 1 picks A, and player 2 picks B then player 1 gets $0 and player 2 gets $650. If player 1 chooses strategy B, and player 2 picks strategy A, then player 1 gets $650 and player 2 gets $0.

a) Write the above game in normal form.

b) Find each player's dominant strategy, if it exists.

c) Find the Nash equilibrium (or equilibrium) of this game.

d) Rank strategy pairs by aggregate payoff (highest to lowest)

e) Can the outcome with the highest aggregate payoff be sustained in equilibrium? Why or why not.

 

Game Theory, Economics

  • Category:- Game Theory
  • Reference No.:- M9308157

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