Consider the payoff matrix listed below: IS |1, -1 3, 0 |2, 1 0, 3 1, 2 |0, 0 3, 1 5, 3 2, 1 What is the Nash Equilibium of the game? a. (B, R) b. (U, Q) c. (B, S) d. (C, Q) M/2/6

QUESTION 3 Up Down In the game above, what is/are the sub-game perfect Nash equilibrium? Ⓒ (up,up) (up,down) Player 1 (down, up) (down, down) No equilibrium exists Up Down Up Down Player 2 P1 gets $25 P2 gets $25 P1 gets $7 P2 gets $30 P1 gets $13 P2 gets $9 P1 gets $8 P2 gets $6

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Player 1 Cooperate (C) Defect (D) Cooperate (C) 3,3 8,0 Player 2 Defect (D) 0,8 1,1 In general, a combination of strategies is a Nash equilibrium if ... Every player is choosing a best response against the other players' strategies. Every player has a positive payoff. The players maximize the sum of their payoffs. The players choose identical strategies. If the game is repeated, which cooperative actions could benefit both players? O Both players choose C. Player 1 chooses C, Player 2 chooses D. O Player 1 chooses D, Player 2 chooses C. Both players choose D.

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