Question

Question 7 (of 22) 0 Save & Exit Save & Exit Submit Submit 7. value: 3.00 points Two friends, Albert and Fred, are simultaneously deciding whether to go to the football match or cinema on Saturday afternoon. If they both go to the football match then Fred gets payoff 6 and Albert 2. If they both go to the cinema Fred gets payoff 2 and Albert 6. If Albert goes to the football match and Fred to the cinema they both get payoff 0. Finally, if Fred goes to the football match and Albert the cinema then Fred gets payoff 3 and Albert 0. Write down the new payoff matrix and find the Nash equilibrium of this game. Fred Football Football for Albert for Fred for Albert for Fred Cinema for Albert for Fred Albert Cinema for Albert for Fred The Nash equilibrium(a) is (are (Click to select) both players choose Football Albert chooses Football, Fred chooses Cinema and Albert chooses Cinema, Fred chooses Football eBook & Resources

Answer 1

Payoff matrix as follows.

Fred Football O 2 (6 O Albert Football for Albert for Fred for Albert for Fred Cinema for Albert for Fred 0 Cinema for Albert for Fred

When Fred chooses Football, Albert's best strategy is Football since payoff is higher (2 > 0).

When Fred chooses Cinema, Albert's best strategy is Cinema since payoff is higher (6 > 0).

When Albert chooses Football, Fred's best strategy is Football since payoff is higher (6 > 0).

When Albert chooses Cinema, Fred's best strategy is Football since payoff is higher (3 > 2).

Nash equilibrium is: Both players choose football.