Game Matrix III

The following questions refer to the game matrix below. Each firm has a choice of advertising, Ads, or not advertising, No ad. The profits each gets depend upon which it chooses.

-Refer to Game Matrix III.Which of the following is a property of this game?
A) Both firms have dominant strategies.
B) There is no pure strategy Nash equilibrium.
C) There is a Nash equilibrium and it is Pareto optimal.
D) There is a Nash equilibrium and it is not Pareto optimal.

Question

Game Matrix III

The following questions refer to the game matrix below. Each firm has a choice of advertising, Ads, or not advertising, No ad. The profits each gets depend upon which it chooses.

-Refer to Game Matrix III.Which of the following is a property of this game?
A) Both firms have dominant strategies. 
B) There is no pure strategy Nash equilibrium. 
C) There is a Nash equilibrium and it is Pareto optimal. 
D) There is a Nash equilibrium and it is not Pareto optimal.

Quizplus · Accepted Answer

There is a Nash equilibrium in this game, which is when both firms choose strategy B. However, this Nash equilibrium is not Pareto optimal as both firms could be better off if they both chose strategy A instead. Therefore, the correct answer is (D) There is a Nash equilibrium and it is not Pareto optimal.

Game Matrix III The Following Questions Refer to the Game Matrix Below. Each