If the payoff to the United States to pursuing nuclear weapons is 100 if the USSR does not pursue nuclear weapons and 50 if they do,and the payoff to the USSR to pursuing nuclear weapons is 80 if the USA doesn't pursue nuclear weapons and 30 if they do,what is the non-cooperative equilibrium?
A) The USA pursues nuclear weapons, the USSR does not.
B) The USA pursues nuclear weapons, the USSR pursues nuclear weapons.
C) The USA does not pursue nuclear weapons, the USSR does not pursue nuclear weapons.
D) The USA does not pursue nuclear weapons, the USSR does pursue nuclear weapons.

Question

Quizplus · Accepted Answer

In a non-cooperative equilibrium, each country will choose the strategy that maximizes its own payoff, given the strategy of the other country. If the USA chooses not to pursue nuclear weapons, the USSR will choose to pursue them and get a payoff of 80. If the USA chooses to pursue nuclear weapons, the USSR's best response is to also pursue them and get a payoff of 30. Similarly, if the USSR chooses not to pursue nuclear weapons, the USA's best response is to pursue them and get a payoff of 100, while if the USSR chooses to pursue nuclear weapons, the USA's best response is also to pursue them and get a payoff of 50. Therefore, the only stable non-cooperative equilibrium is for both countries to pursue nuclear weapons, which corresponds to option B.

If the Payoff to the United States to Pursuing Nuclear