-Refer to Figure 2.6. If x = 2, the Nash equilibrium strategy profile for this game is:
I. {Strategy 1, Strategy 3}
II. {Strategy 1, Strategy 4}
III. {Strategy 2, Strategy 3}
IV. {Strategy 2, Strategy 4}
Which of the following is correct?
A) I only.
B) II only.
C) c. III only.
D) IV only.
E) II and III only.

Question

-Refer to Figure 2.6. If x = 2, the Nash equilibrium strategy profile for this game is:
I. {Strategy 1, Strategy 3}
II. {Strategy 1, Strategy 4}
III. {Strategy 2, Strategy 3}
IV. {Strategy 2, Strategy 4}
Which of the following is correct?
A) I only. 
B) II only. 
C) c. III only. 
D) IV only. 
E) II and III only.

Quizplus · Accepted Answer

The Nash equilibrium is when neither player can improve their payoff by changing their strategy, given the other player's strategy. In this case, if x = 2, the only Nash equilibrium is {Strategy 2, Strategy 3}, because if Player 1 plays Strategy 1, Player 2 can get a higher payoff by playing Strategy 4; and if Player 1 plays Strategy 2, Player 2 can get a higher payoff by playing Strategy 3.