Suppose Jordan and Lee are trying to decide what to do on a Friday. Jordan would prefer to see a comedy while Lee would prefer to see a documentary. One documentary and one comedy are showing at the local cinema. The payoffs they receive from seeing the films either together or separately are shown in the payoff matrix below. Both Jordan and Lee know the information contained in the payoff matrix. They purchase their tickets simultaneously, ignorant of the other's choice. This game:
A)is a prisoner's dilemma.
B)is not a prisoner's dilemma.
C)is an ultimatum bargaining game.
D)has no Nash equilibrium.

Question

Suppose Jordan and Lee are trying to decide what to do on a Friday. Jordan would prefer to see a comedy while Lee would prefer to see a documentary. One documentary and one comedy are showing at the local cinema. The payoffs they receive from seeing the films either together or separately are shown in the payoff matrix below. Both Jordan and Lee know the information contained in the payoff matrix. They purchase their tickets simultaneously, ignorant of the other's choice.  This game:
A)is a prisoner's dilemma. 
B)is not a prisoner's dilemma. 
C)is an ultimatum bargaining game. 
D)has no Nash equilibrium.

Quizplus · Accepted Answer

The game is not a prisoner's dilemma because both players have a preferred outcome (seeing the film they want). The best choice for Jordan is to see the comedy, regardless of Lee's choice, as the payoff for seeing the comedy alone (3) is greater than the payoff for seeing the documentary alone (-1). Similarly, the best choice for Lee is to see the documentary, regardless of Jordan's choice, as the payoff for seeing the documentary alone (4) is greater than the payoff for seeing the comedy alone (-2). Therefore, the players will each choose their preferred film, resulting in a Nash equilibrium.

Suppose Jordan and Lee Are Trying to Decide What to Do