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Figure: Payoff Matrix for Gehrig and Gabriel
-(Figure: Payoff Matrix for Gehrig and Gabriel)Use Figure: Payoff Matrix for Gehrig and Gabriel.The figure describes two people who sell handmade Davy Crockett figurines in San Antonio.Both Gehrig and Gabriel have two strategies available to them: to produce 5,000 figurines each month or to produce 7,000 figurines each month.If both follow a tit-for-tat strategy,equilibrium will be reached when Gehrig produces _____ figurines and Gabriel produces _____ figurines.
A)5,000;5,000
B)7,000;7,000
C)7,000;5,000
D)5,000;7,000

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Use the following to answer question:
Figure: Payoff Matrix for Gehrig and Gabriel 
-(Figure: Payoff Matrix for Gehrig and Gabriel)Use Figure: Payoff Matrix for Gehrig and Gabriel.The figure describes two people who sell handmade Davy Crockett figurines in San Antonio.Both Gehrig and Gabriel have two strategies available to them: to produce 5,000 figurines each month or to produce 7,000 figurines each month.If both follow a tit-for-tat strategy,equilibrium will be reached when Gehrig produces _____ figurines and Gabriel produces _____ figurines.
A)5,000;5,000 
B)7,000;7,000 
C)7,000;5,000 
D)5,000;7,000

Quizplus · Accepted Answer

A tit-for-tat strategy involves each player mirroring the other player's previous action. If both Gehrig and Gabriel follow this strategy, they will eventually settle on an equilibrium where they both produce the same number of figurines, which is the option where they both produce 5,000 figurines. This outcome is stable because neither has an incentive to deviate, assuming the other's action remains unchanged.

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