Economic and Game Theory
|
"Inside every small problem is a large problem struggling to get out." | |||||
Topics | Thread and Full Text View
If both players choose to act Dovish and compromise each player receives 10 points. If one player acts Hawkish when the other chooses to act Dovish then the former receives 30 points while the later gets 0. Express the above game in strategic form and find all Nash Equilibrium points, Discuss each of these equilibria with respect to their corresponding game values. My solution gives only one Nash Equilibrium, although the wording of the question implies there is more than one solution. My payoffs are (player 1, player 2) where H = act Hawkish and D = act Dovish. (H,H) = (-10,-10) (H,D) = (30,0) (D,H) = (0,30) (D,D) = (10,10) With (D,D) being my only solution. [Manage messages] |