Figure: Payoff Matrix for Gehrig and Gabriel
(Figure: Payoff Matrix for Gehrig and Gabriel) The figure Payoff Matrix for Gehrig and Gabriel refers to 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:

Question

Quizplus · Accepted Answer

In a tit-for-tat strategy, each player matches the other player's previous move. If both players produce 5,000 figurines in the first month, they will both produce 5,000 figurines in the second month, and so on. This is the only Nash equilibrium in this game.