Consider a two-player zero-sum game where player 1 can choose strategy A or strategy B, and player
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Question:
Consider a two-player zero-sum game where player 1 can choose strategy A or strategy B, and player 2 can choose strategy C or strategy D. The payoff matrix is given as follows:
C | D | |
---|---|---|
A | 2 | 1 |
B | 3 | 4 |
(a) Write down the mixed strategy for each player.
(b) What is the expected payoff for player 1 and player 2 in the Nash equilibrium of the game?
(c) Is the Nash equilibrium a Pareto optimal outcome? Explain why or why not.
Show all calculations and give your answer in full details.
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
Posted Date: