How to rank strategy pairs by aggregate payoff

Reference no: EM13223238

In a two-player, one-shot simultaneous-move game each player can choose strategy A or strategy B. If both players choose strategy A, each earns a payoff of $500. If both players choose strategy B, each earns a payoff of $100. If player 1 chooses strategy A and player 2 chooses strategy B, then player 1 earns $0 and player 2 earns $650. If player 1 chooses strategy B and player 2 chooses strategy A, then player 1 earns $650 and player 2 earns $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 equilibria) 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?

Reference no: EM13223238

Questions Cloud

Determine what is the macrs-gds property class : A high-precision programmable router for shaping furniture components is purchased by Henderson for $190,000. It is expected to last 12 years. Calculate the depreciation deduction and book value for each year using MACRS-GDS allowances.

What is the book value at the end of the third year : Englehand purchases a slurry-based separator for the minning of clay that costs $700,000 and has an estimated useful life of 10 years, a MACRS-GDS property class of 7 years, and an estimated salvage value of $75,000 after 10 years.

Examine and describe the key elements of change management : Analyse the key best practices which you believe the organisation can adopt to improve its project management maturity level.

What price and quantity would give the monopolist : A monopolist sets price at $10 and sells 100 units. The corresponding marginal revenue is $5 and the marginal cost is $3. What recommendation regarding price and quantity would you give this monopolist

How to rank strategy pairs by aggregate payoff : In a two-player, one-shot simultaneous-move game each player can choose strategy A or strategy B. If both players choose strategy A, each earns a payoff of $500. If both players choose strategy B, each earns a payoff of $100.

Write an international mini-plan for a company : The choice of where to locate each of the functions that comprise the entire value-added chain, from research to production to after-sales servicing - Write an international mini-plan for a company that interests you

Compute a nominal gdp and a real gdp for each year : MILK- $1, 100 quarts. HONEY- $2 50 quarts. 2009: MILK- $1, 200 quarts. HONEY- $2, 100 quarts. 2010: MILK- $2, 200 quarts. HONEY- $4, 100 quarts. Compute a Nominal GDP and a Real GDP for each year using 2008 as the base year.

Explain what concentration of hydronium ions : In a 0.34 M solution of sodium acetate, what concentration of hydronium ions comes from the self-ionization of water? pKb for acetate anion is 9.246

Find the quantities sold by each firm and the market price : Consider a simultaneous move quantity-setting game with two firms facing a demand curve p = 100 - q. Both firms have marginal cost of 20. Suppose one firm maximizes profit and the other maximizes revenue, but both take into account the other firm'..

User Account

All Pages