Consider the game in figure 3. Player 2 T 3,3 1,4 B 4,1 2,2 Player 1 Figure 3: A
ID: 1106104 • Letter: C
Question
Consider the game in figure 3. Player 2 T 3,3 1,4 B 4,1 2,2 Player 1 Figure 3: A Prisoner's Dilemma game. Assume that the payoffs in the figure are S values. (i) Assume that both players have risk neutral utility functions. Find all of the Nash equilibria of this game. (ii) Next, assume that the row player has other regarding preferences with = 0 and = (while the column player has the same preferences as before). Find all of the Nash equilibria of this game (iii) Next, assume that both players have other regarding preferences with = 0 and = (iv) Compare your results from parts (i) and (iii). Using these results, explain one possible mechanism through which a public advertising campaign that announces how often people donate to charity could help generate more cooperative play in prisoner's dilemma-like scenarios.Explanation / Answer
1). The Nash equilibrium is B,R ie (2,2)
This is because , TR is preffered over TL
BR over BL
BL over TL
BR over TR
Thus, we can see that BR is preffered over all other games.