Scenario 13.5
Consider the following game:
-In the game in Scenario 13.5,
A) there is one equilibrium: for both to expand West.
B) there is one equilibrium: for both to expand South.
C) there are two equilibria: either can expand in the West, and the other expands in the South.
D) there is only a mixed strategies equilibrium.
E) all four outcomes are equilibria.

Question

Scenario 13.5
Consider the following game: 
-In the game in Scenario 13.5,
A) there is one equilibrium: for both to expand West. 
B) there is one equilibrium: for both to expand South. 
C) there are two equilibria: either can expand in the West, and the other expands in the South. 
D) there is only a mixed strategies equilibrium. 
E) all four outcomes are equilibria.

Quizplus · Accepted Answer

Both players have a dominant strategy to expand in the West, as it yields a higher payoff regardless of the other player's choice. However, if both players choose to expand in the West, they will end up with a lower payoff compared to if one player expands in the South and the other player expands in the West. Therefore, the equilibrium is for one player to choose to expand in the West and the other player to expand in the South. This results in two equilibria, one where Player A expands West and Player B expands South, and the other where Player B expands West and Player A expands South.

Scenario 13.5 Consider the Following Game