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11. Small towns can get boring. Two teenagers, James and Dean, take their cars to opposite ends of W. Jackson Street, Macomb, IL, at midnight

11. Small towns can get boring. Two teenagers, James and Dean, take their cars to opposite ends of W. Jackson Street, Macomb, IL, at midnight and start to drive toward each other (a game of "Chicken"). The one who swerves to avoid a collision is the "chicken" (getting -1 util of disutility) and the one who keeps going straight is the winner (for 1 util). If both maintain a straight course, there is a collision in which both cars are damaged and both players are badly injured (-2 each).

  • a. Put this game in strategic form.
  • b. List each player's best responses (or show in the matrix).What is/are the Pure Strategy Nash Equilibrium (or equilibria) of this game?
  • c. Suppose Dean yells "I don't care what you do, I'm always going to go straight?" Would this deter James? Explain.
  • d. Suppose that James had access to some handcuffs that he could use to visibly lock his hands to the rearview mirror, completely inhibiting his ability to turn the steering wheel. Would James want to accomplish this and if so, what necessary condition exists for this to work?

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