Mick and Nicky need to decide where to locate their restaurants.They each have to simultaneously choose to locate on State or Main.The payoffs are as follows.If both restaurants are located on Main, each player gets a payoff of 10.If they both choose State, the payoffs are 5 to each player.If Mick locates on State and Nicky on Main, each player gets a payoff of 2.If Mick locates on Main and Nicky opts for State each player gets 0.What is the Nash equilibrium?
A)(State, State) where the first strategy is Mick's and Nicky's is the second strategy.
B)(State, Main)
C)(Main, Main) and (State, State)
D)(Main, State) and (State, Main)
E)(Main, State)

Question

Quizplus · Accepted Answer

A Nash equilibrium occurs when no player can benefit by changing their strategy while the other player's strategy remains unchanged. In this scenario, both (Main, Main) and (State, State) are Nash equilibria because if either player deviates from these strategies, their payoff decreases.

Mick and Nicky Need to Decide Where to Locate Their