The normal-form game box below outlines a generic game for two players to illustrate basic principles. Each player has two strategies (top and bottom for player 1 and left and right for player 2). The letters in the boxes represent the payoffs based on the combination of strategies chosen, so if the choices are (bottom, left), player 1 receives a payoff of e and player 2 receives a payoff of f. Player 2 Game Matrix Left Right Top a, b Player 1 Bottom e, f c, d g.h 2nd attempt Part 1 (1 point) If (top, left) is a dominant strategy equilibrium, which of the following must be true? Choose one or more: A. h>t B. g>c C. b> d D. c> g E. a> e F. f>h Which of the following statements is true? Choose one or more: A. No Nash equilibrium is also a dominant strategy equilibrium. B. No dominant strategy equilibrium is also a Nash equilibrium. C. Every dominant strategy equilibrium is also a Nash equilibrium. D. Every Nash equilibrium is also a dominant strategy equilibrium. See Hint
The normal-form game box below outlines a generic game for two players to illustrate basic principles. Each player has two strategies (top and bottom for player 1 and left and right for player 2). The letters in the boxes represent the payoffs based on the combination of strategies chosen, so if the choices are (bottom, left), player 1 receives a payoff of e and player 2 receives a payoff of f. Player 2 Game Matrix Left Right Top a, b Player 1 Bottom e, f c, d g.h 2nd attempt Part 1 (1 point) If (top, left) is a dominant strategy equilibrium, which of the following must be true? Choose one or more: A. h>t B. g>c C. b> d D. c> g E. a> e F. f>h Which of the following statements is true? Choose one or more: A. No Nash equilibrium is also a dominant strategy equilibrium. B. No dominant strategy equilibrium is also a Nash equilibrium. C. Every dominant strategy equilibrium is also a Nash equilibrium. D. Every Nash equilibrium is also a dominant strategy equilibrium. See Hint
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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