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# Payoff Matrix - Nash Equilibria

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In the following payoff matrix, Player A announces that she will cooperate.
Player B
Defect Cooperate
A: -1 A: 0.5
B:2 B:1
Cooperate
Player A
A:0 A:1
Defect B:0.5 B: -1

a. How is this likely to change the outcome?

c. How could Player A maker her pronouncement believable?

https://brainmass.com/economics/game-theory/payoff-matrix-nash-equilibria-332038

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a. B's dominant strategy is to Defect as the payout for that is more than the payout for the respective payouts to Cooperate. A's dominant strategy is to defect as well as ...

\$2.19

## Answers to three common Microeconomics review questions. The topics covered are:1. Payoff Matrix and Dominant Strategy 2. Nash Equilibrium 3. Pricing Decisions

Question 5

The figure shows the payoff matrix for two producers of bottled water, Blue Spring and Purple Rain. Each has two strategies available to it: a high price and a low price. The dominant strategy for Purple Rain is to ...
a) always charge a low price.
b) always charge a high price.
c) always adopt the same strategy as Blue Spring.
d) Purple Rain does not have a dominant strategy.

Question 6

The figure shows the payoff matrix for two producers of bottled water, Blue Spring and Purple Rain. Each has two strategies available to it: a high price and a low price. Which outcomes are Nash equilibrium(s) in this game?