Question

PROBLEM 4 In the game pictured in Figure 2 is it ever rational for player 1 to select strategy C? Why or why not? 3,0 X NO--- - 0,3 с в 1,1 3.0 Figure 2:

Answer 1

First understand the diagram which says that if player 1 chooses A and player 2 chooses X, then player 1 gets 3 as payoff while player 2 gets 0 payoff. This means that in (3,0), the payoff of player 1 is represented on left while payoff of player 2 is represented in right of bracket.

If player 1 chooses A, player 2 have two options which is to choose X or Y. Player 2 will anyday choose Y as she will get 3 as payoff in comparison of 0 if she chooses X. It will give player 1 payoff equals to 0.

If player 1 chooses B, player 2 again have two options to choose either X or Y. Player 2 will choose X as it gives her maximum payoff which gives 0 payoff to player 1.

If player 1 chooses C, player 1 will get 1 as well as Y will get 1.

So, player 1 can secure her payoff of 1 while selecting C which makes her rational in selecting it.