Question

question #12

11 In a two-person repeated game, a tit-for-tat strategy is: When each player pursues his or her own self- interest without any cooperation. When players start off as noncooperative and then cooperate when one or both players show interest in colluding eWhen players start by cooperating and then mimic the other player's last move. When neither player defects. 12 Nash equilibrium is: Where one player maximizes payoff and the other does not. When one player's strategy is the best response to the other players strategy. Where the outcome is always efficient. Difficult to determine. 13 Tom wants to avoid any accidents on the work floor bf his factory. If an accident does occur, it would cost him $500,000 in damages. Installing safety equipment would decrease the probability of an accident occurring from 20% to 10%. However, the equlpment costs $20,000 to install. Would Tom install the safety equipment? Yes, because it costs him less than it is worth. Yes b

Answer 1

12. Nash equilibrium is reached when both players follow their dominant strategy, because that is the best response to the strategies of the other player.

Answer: option B