Asked by Angela Gagliardi on Mar 10, 2024
Verified
Two players are engaged in a game of Chicken.There are two possible strategies, Swerve and Drive Straight.A player who chooses to Swerve is called Chicken and gets a payoff of zero, regardless of what the other player does.A player who chooses to Drive Straight gets a payoff of 432 if the other player swerves and a payoff of 48 if the other player also chooses to Drive Straight.This game has two pure strategy equilibria and
A) a mixed strategy equilibrium in which each player swerves with probability .10 and drives straight with probability .90.
B) a mixed strategy in which each player swerves with probability .05 and drives straight with probability .95.
C) a mixed strategy equilibrium in which one player swerves with probability .10 and the other swerves with probability .90.
D) two mixed strategies in which players alternate between swerving and driving straight.
E) no mixed strategies.
Pure Strategy Equilibria
A game theory concept where each player chooses a single strategy that results in no player having an incentive to unilaterally change their choice.
Mixed Strategy
In game theory, a strategy in which a player employs a mix of actions with certain probabilities to make it impossible for opponents to predict their actions.
Payoff
The return or reward received by a participant in a game or transaction, often evaluated in terms of utility or financial gain.
- Distinguish between pure strategy and mixed strategy equilibria in games.
Verified Answer
MG
Michelle GodfreyMar 10, 2024
Final Answer :
A
Explanation :
The game has two pure strategy equilibria: both players drive straight or both players swerve. However, in the absence of communication, it is likely that both players will end up driving straight, as neither player wants to be the one who swerves and gets a payoff of zero. Therefore, the mixed strategy equilibrium in which each player swerves with probability .10 and drives straight with probability .90 is the best choice because it allows both players to occasionally swerve and avoid the risk of getting zero payoff while still being able to drive straight and get the highest possible payoff of 1048 if the other player swerves.
Learning Objectives
- Distinguish between pure strategy and mixed strategy equilibria in games.