Question 3

3. Two criminals are considering whether to rob a bank or a liquor store (LCBO). To successfully rob a bank requires two people, but the LCBO can be robbed by just a single individual. If they both decide to rob the bank, then they each receive $30,000. If they rob the liquor store, they get $1,000. Otherwise, they receive nothing. The situation is depicted below. Figure 2: The Bank Job Criminal Two Bank LCBO Criminal One Bank 30000. 30000 0, 1000 LCBO 1000, 0 1000, 1000 Number left (right) of comma refers to 1's (2's) payoff. What is this game's Nash equilibrium? Show your work. (20%)