3. In 1950, economists Merrill Flood and Melvin Dresher devised an experiment to challenge the Nash equilibrium.

They presented the following payoff matrix to two economists and asked them to play the following game 100 times in succession:

a. What is the Nash equilibrium of this payoff matrix?

b. Is the payoff matrix symmetric? If not, who has the advantage?
Do you think this affected the strategy of the players? If so, how?

c. In 60 of the 100 games, the players cooperated. Why do you think this was so?

d. What do you suppose the players chose for the 100th play? Why?

Transcribed Image Text:

Player A Cooperate Cooperate A: -1 Defect Player B A: 0.5 Defect A: 0 B: 2 A: 1 B: 1 B: 0.5 B: -1