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The snowdrift game: Two drivers are caught in a snowstorm and a big snowdrift blocks the road. To go home they have to clear the path. The fairest solution is for them to clear the path together. If one simply refuses to do it, the other driver will just do it because he wants to go home. But if both drivers have the same idea then nobody goes home. A variant of this game with numerical payoff is the following: I will give to Robert and Chelsea each a gift worth $40 if I receive a total of $30 in cash. Their options are to either to pay the fee or not pay the fee knowing that if both of them decide to pay then then they will share the fee and pay $15 each. Write down a payoff table for the game and find the Nash equilibria. 

Operation Management, Management Studies

  • Category:- Operation Management
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