Purchase Solution

Game Theory: two-player, one-shot simultaneous-move game

Not what you're looking for?

Ask Custom Question

In a two-player, one-shot simultaneous-move game each player can choose strategy A or strategy B. If both players choose strategy A, each earns a payoff of $500. If both players choose strategy, each earns a payoff of $100. If player one chooses strategy A and player 2 chooses strategy B, then the player 1 earns $0 and player 2 earns $650. If player 1 chooses B and player 2 chooses strategy A, then player 1 earns $650 and player 2 earns $0.

a. Write the above game in normal form.
b. Find each player's dominant strategy, if it exists.
c. Find the Nash equilibrium of this game.
d. Rank strategy pairs by aggregate payoffs (highest to lowest).
e. Can the outcome with the highest aggregate payoff be sustained in equilibrium? Why or why not.

Purchase this Solution

Solution Summary

Gives the norm form, dominant strategy and Nash equilibrium for a described game.

Solution Preview

a) The normal form of this game is as follows:
| Player 2 chooses strategy A | Player 2 chooses strategy B
------------------------------------------------------------------------------------------------------------
Player 1 chooses strategy A | $500, $500 | $0, ...

Purchase this Solution


Free BrainMass Quizzes
Basics of corporate finance

These questions will test you on your knowledge of finance.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Motivation

This tests some key elements of major motivation theories.