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The following table shows the payoff matrix that represents the strategic interaction between two classmates, Amelie and Brianna. They are deciding which Scottish island to
The following table shows the payoff matrix that represents the strategic interaction between two classmates, Amelie and Brianna. They are deciding which Scottish island to visit on a day trip.
Brianna | |||
Kerrera | Cumbrae | ||
Amelie | Kerrera | 5, 2 | 1, 1 |
Cumbrae | 3, 3 | 3, 5 |
a. Amelie likes Kerrera more than Cumbrae, conditional on both choosing the same island
b. In a sequential game where Brianna can move first, Amelie would choose to visit Cumbrae
c. In a one-shot, simultaneous game, both Amelie and Brianna will choose to visit Kerrera since their total happiness would be the highest
d. There are two Nash equilibria
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