Figure 3.1 : Homer and Marge have been accused of committing a crime, and the payoff matrix below represents the payoffs associated with confessing to the crime and denying having committed the crime.
-Refer to Figure 3.1. A Nash Equilibrium occurs where
A) Homer confesses to committing the crime and Marge denies committing the crime.
B) Marge confesses to committing the crime and Homer denies committing the crime.
C) Homer and Marge both confess to committing the crime.
D) Homer and Marge both deny committing the crime.

Question

Figure 3.1 : Homer and Marge have been accused of committing a crime, and the payoff matrix below represents the payoffs associated with confessing to the crime and denying having committed the crime. 
-Refer to Figure 3.1. A Nash Equilibrium occurs where
A) Homer confesses to committing the crime and Marge denies committing the crime. 
B) Marge confesses to committing the crime and Homer denies committing the crime. 
C) Homer and Marge both confess to committing the crime. 
D) Homer and Marge both deny committing the crime.

Quizplus · Accepted Answer

In a Nash Equilibrium, each player's strategy is optimal given the other player's strategy. In the context of the Prisoner's Dilemma, which this question is based on, confessing (regardless of what the other does) is the dominant strategy for both players. Thus, both confessing is the Nash Equilibrium because neither Homer nor Marge can unilaterally change their strategy to get a better outcome once the other has confessed.

Figure 31 : Homer and Marge Have Been Accused of Committing