Use the following payoff matrix for a one-shot game to answer the accompanying questions.

Player 2

X Y

Player 1 A 10,10 5,-150

B -150,5 25,25

a. Determine the Nash equilibrium outcomes that arise if the players make decisions independently, simultaneously, and without any communication.

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(-150,5)(10,10)(25,25)(5,-150)

Which of these outcomes would you consider most likely?

(25,25)(10,10)(5,-150)(-150,5)

b. Suppose player 1 is permitted to "communicate" by uttering one syllable before the players simultaneously and independently make their decisions. What should player 1 utter?

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B

A

What outcome do you think would occur as a result?

(-150,5)(5,-150)(10,10)(25,25)

c. Suppose player 2 can choose its strategy before player 1, that player 1 observes player 2's choice before making her decision, and that this move structure is known by both players. What outcome would you expect?

(5,-150)(-150,5)(10,10)(25,25)