Scenario: Your friend Joe and you decide to race your new cars. However, both of you are caught speeding by a police patrol. The matrix below shows the respective payoffs for each choice of actions. The first number listed in each cell is the payoff to the row player, and the second number listed is the payoff to the column player.

-Refer to the scenario above.Which of the following strategy combinations denotes the dominant strategy equilibrium in this case?
A) (Bribe, Bribe)
B) (Bribe, Do not bribe)
C) (Do not bribe, Bribe)
D) (Do not bribe, Do not bribe)

Question

Scenario: Your friend Joe and you decide to race your new cars. However, both of you are caught speeding by a police patrol. The matrix below shows the respective payoffs for each choice of actions. The first number listed in each cell is the payoff to the row player, and the second number listed is the payoff to the column player.
 
-Refer to the scenario above.Which of the following strategy combinations denotes the dominant strategy equilibrium in this case?
A) (Bribe, Bribe) 
B) (Bribe, Do not bribe) 
C) (Do not bribe, Bribe) 
D) (Do not bribe, Do not bribe)

Quizplus · Accepted Answer

In this scenario, there is no dominant strategy equilibrium as there is no option that is the best choice for both players, regardless of the other player's choice. Both players are better off choosing not to bribe and accepting the ticket rather than risking the higher payoff of going free but facing a much larger penalty if caught. Therefore, the only possible equilibrium is when both players choose not to bribe, resulting in a payoff of (2,2) for both players. So, (D) is the best choice.

Scenario: Your Friend Joe and You Decide to Race Your