The following payoff matrix shows the outcomes for the US and the USSR from relying on conventional weapons or atomic weapons.The percentages refer to the fraction of the population that would die if a war occurred under the two weapons strategies.Assume the payoff matrix is for 1945,shortly after the US had demonstrated the effectiveness of the atomic bomb in World War II,i.e. ,the example begins in the upper right cell where USA has atomic weapons and the USSR has only conventional weapons.
Refer to the information given above.The Nash equilibrium in this situation is for:
A) both countries to have conventional weapons.
B) both countries to have atomic weapons.
C) the USSR to have atomic weapons and the USA to have conventional weapons.
D) the USA to have atomic weapons and the USSR to have conventional weapons.
Correct Answer:
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