Question
We are observing two friends, Sasha and Gao, who are interacting in a game that results in them receiving various amounts of money. However, we
We are observing two friends, Sasha and Gao, who are interacting in a game that results in them receiving various amounts of money. However, we do not know their preferences. Assume the game has three possible outcomes: (x), in which Sasha receives $5 and Gao $3; (y) in which Sasha receives $2 and Gao $2; and (z) in which Sasha receives $4 and Gao receives $5. When I model this game, I assign the following payoffs to these outcomes for Sasha and Gao: x = (2, 4), y = (5, 2), z = (3, 4) (where the first number in the parentheses is Sasha's payoff and the second number is Gao's payoff).
Describe what Sasha and Gao's preferences could each be that would make those payoffs sensible given the underlying monetary gains.
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