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Q1. The game of Chicken is played by two macho teens who speed toward each other on a single-lane road. The first to veer off
Q1. The game of Chicken is played by two macho teens who speed toward each other on a single-lane road. The first to veer off is branded the chicken, whereas the one who does not veer gains peer-group esteem. Of course, if neither veer, both die in the resulting crash. Payoffs to the Chicken game are provided in the following table. Teen 2 Veer Does not veer Teen 1 veer 2,2 1,3 Does not veer 3,1 0,0 a) Does there exist a dominate strategy for both teens? If yes, write down the strategy. If no, explain why. b) Find all pure-strategy Nash equilibria. c) Compute the mixed-strategy Nash equilibrium. Denote the probability to veer for teen 1 as Pi, and that for the teen 2 as P2
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