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Betty and Sammy both witness a crime. Each of them decides whether or not to call the police. If at least one of them calls,
Betty and Sammy both witness a crime. Each of them decides whether or not to call the police. If at least one of them calls, then the crime will be solved and, for each of them, this adds a benefit of 1 to their payoff. For both Betty and Sammy, calling the police reduces the caller's payoff by c(0,1). Suppose Betty and Sammy must make the decision to call or not to call as part of a static game. In other words, Betty and Sammy must make their decisions simultaneously. a. Create the payoff matrix for this game. Find all pure-strategy Nash Equilibria. Are there any strictly dominant strategies? b. Now assume c1. Find all pure-strategy Nash Equilibria. Betty and Sammy both witness a crime. Each of them decides whether or not to call the police. If at least one of them calls, then the crime will be solved and, for each of them, this adds a benefit of 1 to their payoff. For both Betty and Sammy, calling the police reduces the caller's payoff by c(0,1). Suppose Betty and Sammy must make the decision to call or not to call as part of a static game. In other words, Betty and Sammy must make their decisions simultaneously. a. Create the payoff matrix for this game. Find all pure-strategy Nash Equilibria. Are there any strictly dominant strategies? b. Now assume c1. Find all pure-strategy Nash Equilibria
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