Scenario 13.8
Consider the following game:
-In game in Scenario 13.8, what is the Nash equilibrium?
A) The strategy pair associated with $1, $10.
B) The strategy pair associated with $2, $0.
C) The strategy pair associated with $1, -$5000.
D) The strategy pair associated with $2, $2.
E) There is no Nash equilibrium in pure strategies.

Question

Scenario 13.8
Consider the following game: 
-In game in Scenario 13.8, what is the Nash equilibrium?
A) The strategy pair associated with $1, $10. 
B) The strategy pair associated with $2, $0. 
C) The strategy pair associated with $1, -$5000. 
D) The strategy pair associated with $2, $2. 
E) There is no Nash equilibrium in pure strategies.

Quizplus · Accepted Answer

The Nash equilibrium is the strategy pair where neither player can gain by unilaterally changing their strategy. In this game, player A's best response to player B choosing $2 is to also choose $2, as this yields a payoff of $2 which is the highest possible for player A. Similarly, player B's best response to player A choosing $2 is also to choose $2, as this yields a payoff of $2 which is the highest possible for player B. Therefore, the strategy pair associated with $2, $2 is a Nash equilibrium.

Scenario 13.8 Consider the Following Game