Alice and Betsy are playing a game in which each can play either of two strategies, leave or stay.If both play the strategy leave, then each gets a payoff of $400.If both play the strategy stay, then each gets a payoff of $800.If one plays stay and the other plays leave, then the one who plays stay gets a payoff of $C and the one who plays leave gets a payoff of $D.When is the outcome where both play leave a Nash equilibrium? A)Never, since $800 $400. B)When $400 C and D $800 but not when $800 D C)When D C and C $400. D)Whenever D C

Question

Alice and Betsy are playing a game in which each can play either of two strategies, leave or stay.If both play the strategy leave, then each gets a payoff of $400.If both play the strategy stay, then each gets a payoff of $800.If one plays stay and the other plays leave, then the one who plays stay gets a payoff of $C and the one who plays leave gets a payoff of $D.When is the outcome where both play leave a Nash equilibrium?
A)Never, since $800 > $400.
B)When $400 > C and D > $800 but not when $800 > D
C)When D > C and C > $400.
D)Whenever D < $800.
E)Whenever $400 > C

Quizplus · Accepted Answer

The outcome where both play leave is a Nash equilibrium when no player has an incentive to deviate from their strategy given the other player's strategy. This occurs when the payoff for leaving ($400) is greater than the payoff for staying ($C) if the other player leaves.

Alice and Betsy Are Playing a Game in Which Each