Question

1. Two classmates, Jorge and George, are assigned an extra-credit group project. Each student can choose to Shirk or to Work. If one or more players choose Work, the project is completed and provides each with extra credit valued at 4 payoff units each. The cost of completing the project is 6 units of effort (measured in payoff units) that is divided equally among all players who choose to Work and this is subtracted from their payoff. If they both Shirk, they do not have to expend any effort, but the project is not completed, giving each a payoff of 0. The teacher can only tell whether the project is completed and not which students contributed to it.
   1. Write down the normal form (payoff matrix) for this game. Assume that students choose to Shirk or Work simultaneously.
   2. Does either player have a dominant strategy? Explain your answer.
   3. Find the Nash equilibrium or equilibria. Explain why.

Answer 1