Two players John and Dany come from Denmark, which imposes a strong cultural value on equality. They are to participate in a game where they are put in separate rooms and are each to pick one of the five letters: G, K, L, Q or W. If they choose the same letters, only then they both get prizes as follows. Otherwise they get 0.

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Q. 1
Two players John and Dany come from Denmark,
which imposes a strong cultural value on equality.
They are to participate in a game where they are
put in separate rooms and are each to pick one of
the five letters: G, K, L, Q or W. If they choose the
same letters, only then they both get prizes as
follows. Otherwise they get 0.
Letter
John's Prize
Dany's Prize 5
a. Draw the table for this game and identify the
Nash equilibria.
b. Can one of the equilibria be a focal point?
Which one? Why?
K
2
4
W
3
4
3
3
Transcribed Image Text:Two players John and Dany come from Denmark, which imposes a strong cultural value on equality. They are to participate in a game where they are put in separate rooms and are each to pick one of the five letters: G, K, L, Q or W. If they choose the same letters, only then they both get prizes as follows. Otherwise they get 0. Letter John's Prize Dany's Prize 5 a. Draw the table for this game and identify the Nash equilibria. b. Can one of the equilibria be a focal point? Which one? Why? K 2 4 W 3 4 3 3
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