Imagine two drivers playing chicken, a game where they drive towards one another with their cars. Each driver has two actions: go straight or turn left. For simplicity, we standardize directions according to the perspective of an overhead observer. Thus, if both drivers select the same action, they will crash. At the same time, each driver wants to go straight, to seem tough and fearless. Utilities are given by the following table: Utility Turn Left Straight Turn Left -20, -20 - 5, 10 Straight 10, -5 -10, -10 These are in the format (row player, column player) 1. Does either player have a dominating strategy? If so, identify all of them. 2. What are the pure strategy Nash equilibria of this game? 3. Does the game have any mixed strategy Nash equilibria? If yes, compute all of them.
Imagine two drivers playing chicken, a game where they drive towards one another with their cars. Each driver has two actions: go straight or turn left. For simplicity, we standardize directions according to the perspective of an overhead observer. Thus, if both drivers select the same action, they will crash. At the same time, each driver wants to go straight, to seem tough and fearless. Utilities are given by the following table: Utility Turn Left Straight Turn Left -20, -20 - 5, 10 Straight 10, -5 -10, -10 These are in the format (row player, column player) 1. Does either player have a dominating strategy? If so, identify all of them. 2. What are the pure strategy Nash equilibria of this game? 3. Does the game have any mixed strategy Nash equilibria? If yes, compute all of them.
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter22: Frontiers Of Microeconomics
Section: Chapter Questions
Problem 6PA
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