Show Work. In a two-player, one-shot simultaneous-move game each player can choo
ID: 2438970 • Letter: S
Question
Show Work.
In a two-player, one-shot simultaneous-move game each player can choose strategy A or strategy B. If both players choose strategy A each earns a payoff of $400. If both players choose strategy B, each earns a payoff of $200. If player 1 chooses strategy A and player 2 chooses strategy B, then player 1 earns $100 and player 2 earns $600. If player 1 chooses strategy B and player 2 chooses strategy A, then player 1 earns $600 and player 2 earns $100 a. Write the above game in normal form. Player 2 Strategy Player 1 b. Find each player's dominant strategy, if it exists. Player 1's dominant strategy | (Click to select) . Player 2's dominant strategy:_(Click to select) c. Find the Nash equilibrium of this game. (Click to select) d. Which strategy pair has the highest aggregate payoff? (Click to select)Explanation / Answer
Answer:
Player 1
Player 2
Strategy ($)
A
B
A
400, 400
600, 100
B
100,600
200, 200
* 1st number in the cell shows payoff of player 1 and 2nd number shows payoff of player 2
2- Player 2’s dominant strategy : B where his payoff is $600 and player 1 payoff is $100
Player 1’s dominant strategy: B where his payoff is $600 and player 2 payoff is $100
3. The Nash equilibrium is strategy A where both player have $400 payoff
4. Strategy A have highest aggregate payoff. Both player’s payoff is $400, $400 so aggregate payoff is $800
5.the outcome with the highest aggregate payoff cannot be sustained in equilibrium because both the player has different dominating payoff strategy that is B and as already given that it is a one-shot simultaneous - move game
Player 1
Player 2
Strategy ($)
A
B
A
400, 400
600, 100
B
100,600
200, 200