Calculating the nash equilibrium

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Reference no: EM1372807

Suppose you have been offered chance to participate in a Treasure Hunt game whose rules are as follows. There are 3-colored boxes: red, green and yellow. The game show host must hide a $100 bill in a box of his choice. You have the option of opening one and only one box/ If the money was hidden in that box, you win it. Otherwise, it returns to the host. Each box has a fee which you must pay to the host if you choose to open that box. The fees are $50 for the red box, $20 for the green box, and $0 for the yellow box. Assume that both you and the show host want to maximize expected earnings.

a) Write down the normal form (payoff matrix) of this game.
b) Find the Nash equilibrium.

Reference no: EM1372807

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