Big Pig and Little Pig have two possible strategies, Press the Button, and Wait at the Trough.If both pigs choose Wait at the Trough, both get 3.If both pigs choose Press the Button, then Big Pig gets 8 and Little Pig gets 2.If Little Pig presses the button and Big Pig waits at the trough, then Big Pig gets 10 and Little Pig gets 0.Finally, if Big Pig presses the button and Little Pig waits at the trough, then Big Pig gets 2 and Little Pig gets 1.In Nash equilibrium,
A)Little Pig will get a payoff of 1 and Big Pig will get a payoff of 2.
B)Little Pig will get a payoff of 2 and Big Pig will get a payoff of 8.
C)both pigs will wait at the trough.
D)Little pig will get a payoff of zero.
E)the pigs must be using mixed strategies.

Question

Quizplus · Accepted Answer

Both pigs choosing to wait at the trough is the only Nash equilibrium because neither pig has an incentive to deviate from this strategy. If one pig chooses to press the button while the other waits at the trough, then the pressing pig will get a lower payoff than if both pigs had pressed the button, and the waiting pig will get nothing. Therefore, both pigs are better off waiting at the trough, since this guarantees them both a payoff of 3.

Big Pig and Little Pig Have Two Possible Strategies, Press