ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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7. Solving for dominant strategies and the Nash equilibrium
Suppose Gabriel and Nia are playing a game that requires both to simultaneously choose an action: Up or Down. The payoff matrix that follows shows
the earnings of each person as a function of both of their choices. For example, the upper-right cell shows that if Gabriel chooses Up and Nia chooses
Down, Gabriel will receive a payoff of 6 and Nia will receive a payoff of 4.
Gabriel
Up
Down
Up
6,3
3,3
Nia
Down
6, 4
7,4
In this game, the only dominant strategy is for
to choose
The outcome reflecting the unique Nash equilibrium in this game is as follows: Gabriel chooses
and Nia chooses
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Transcribed Image Text:7. Solving for dominant strategies and the Nash equilibrium Suppose Gabriel and Nia are playing a game that requires both to simultaneously choose an action: Up or Down. The payoff matrix that follows shows the earnings of each person as a function of both of their choices. For example, the upper-right cell shows that if Gabriel chooses Up and Nia chooses Down, Gabriel will receive a payoff of 6 and Nia will receive a payoff of 4. Gabriel Up Down Up 6,3 3,3 Nia Down 6, 4 7,4 In this game, the only dominant strategy is for to choose The outcome reflecting the unique Nash equilibrium in this game is as follows: Gabriel chooses and Nia chooses
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