Question

Suppose Tim and Alyssa are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will eam as a function of both of their choices. For example, the lower-right cell shows that If Tim chooses Right and Alyssa chooses Right, Tim will receive a payoff of 6 and Alyssa will receive a payoff of s. Alyssa Left Right 4,5 Left Tim Right 5,4 6,5 The only dominant strategy in this game is for to choose The outcome reflecting the unique Nash equilibrium in this game is as follows: Tim chooses and Alyssa chooses

Answer 1

Ans. If Tim chooses left, Alyssa must choose right to get maximum payoff of 5 and if Tim chooses right, Alyssa must choose right to get maximum payoff of 5.
a) Thus, Alyssa's dominant strategy is to choose right.

If Alyssa chooses left, Tim must choose left to get maximum payoff of 8 and if Alyssa chooses right, then Tim must choose right to get maximum payoff of 6.

Thus, the Nash Equilibrium here is both choosing right where payoffs are (6,5).

* Please don’t forget to hit the thumbs up button, if you find the answer helpful.

Thank You