The game in strategic form below describes the situation between Northland and Southland. Each must decide whether to reduce carbon emissions. The cells describe national welfare in billion dollars. Identify the Nash equilibrium or equilibria in pure strategies. $\begin{array}{c}
\quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad\text { Southland }\
\text { Northland }
\begin{array}{|l|c|c|}
\hline& \text { Maintain emissions } & \text { Reduce emissions } \
\hline\text { Maintain emissions } &-2,-2 & 2,-1 \
\hline \text { Reduce emissions } &-1,2 & 1,1 \
\hline
\end{array}\end{array}$

Question

The game in strategic form below describes the situation between Northland and Southland. Each must decide whether to reduce carbon emissions. The cells describe national welfare in billion dollars. Identify the Nash equilibrium or equilibria in pure strategies. $\begin{array}{c}
 \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad\text { Southland }\
\text { Northland }
\begin{array}{|l|c|c|}
\hline& \text { Maintain emissions } & \text { Reduce emissions } \
\hline\text { Maintain emissions } &-2,-2 & 2,-1 \
\hline \text { Reduce emissions } &-1,2 & 1,1 \
\hline
\end{array}\end{array}$

Quizplus · Accepted Answer

The Nash equilibrium is for both Northland and Southland to reduce emissions. This is because each country's best strategy is to reduce emissions, regardless of what the other country does. If Northland reduces emissions, it will get a payoff of 1 regardless of what Southland does. If Northland maintains emissions, it will get a payoff of -2 if Southland reduces emissions and a payoff of -1 if Southland maintains emissions. Therefore, Northland's best strategy is to reduce emissions. Similarly, Southland's best strategy is to reduce emissions. If Southland reduces emissions, it will get a payoff of 1 regardless of what Northland does. If Southland maintains emissions, it will get a payoff of -2 if Northland reduces emissions and a payoff of -1 if Northland maintains emissions. Therefore, Southland's best strategy is to reduce emissions.

The Game in Strategic Form Below Describes the Situation Between