Table 16.7
The USA and China are locked in negotiations to cut emissions.The following table represents the pay-offs from cutting emissions and continuing to pollute:

-Refer to Table 16-7.If the USA plays its dominant strategy, its payoff at the Nash Equilibrium will be:
A)$1mil
B)$2.5mil
C)$0.8mil
D)$2mil

Question

Table 16.7
The USA and China are locked in negotiations to cut emissions.The following table represents the pay-offs from cutting emissions and continuing to pollute:
 
-Refer to Table 16-7.If the USA plays its dominant strategy, its payoff at the Nash Equilibrium will be:
A)$1mil 
B)$2.5mil 
C)$0.8mil 
D)$2mil

Quizplus · Accepted Answer

The Nash Equilibrium is (USA, Attack; USSR, Accommodate). The payoff for the USA at this equilibrium is $1 million.

Table 16.7 The USA and China Are Locked in Negotiations to Cut