Asked by Jibran Bashir on Sep 24, 2024
Verified
What is the Nash equilibrium of this game?
A) Cheat,Cheat
B) Not cheat,Not cheat
C) Sam cheats,Sarah doesn't
D) Sarah cheats,Sam doesn't
Nash Equilibrium
A concept in game theory where all participants are assumed to know the equilibrium strategies of the others, and no player has anything to gain by changing only their own strategy.
Payoff
The return or reward received as a result of making a particular decision or action, often used in the context of game theory and economics.
- Uncover and appraise Nash equilibria in several strategic conditions.
Verified Answer
LO
Lisandra Ortegaabout 22 hours ago
Final Answer :
A
Explanation :
In a Nash equilibrium, each player's strategy is optimal given the other player's strategy. Here, regardless of what one player decides, the other player's best response is to cheat, as cheating guarantees a payoff of at least 1 (if both cheat) or 10 (if the other doesn't cheat), compared to a maximum payoff of 7 for not cheating. Thus, the Nash equilibrium is where both players choose to cheat.
Learning Objectives
- Uncover and appraise Nash equilibria in several strategic conditions.