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The leaders of two countries (A and B) are angry at each other over an international misunderstanding. The leaders can decide whether or not to

The leaders of two countries (A and B) are angry at each other over an international misunderstanding. The leaders can decide whether or not to bomb the capital of the other country. Their payoffs are given by the following payoff matrix. Country A's options are on the rows, and Country B's are on the columns. What is the Nash Equilibrium outcome for this game? Assume the countries refuse to talk to each other.

Do not bomb; Do not bomb

Bomb; Bomb

Do not bomb; Bomb

Bomb; Do not bomb

There is no Nash Equilibrium.

image text in transcribed
Bomb Do not Bomb Bomb (-5, -5) (2, -6) Do not Bomb (-6, 3) (1, 1)

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