You and your good friend Larry are supposed to meet for lunch in Champaign, Illinois. You know you have arranged to meet either at a sports bar, Legends (L), or at a pizza place, Papa Del's (PD), but you cannot remember which and you cannot communicate with each other.

You love pizza and prefer Papa Del's. Larry, on the other hand, would rather go to Legends. Nevertheless, you both much prefer to be together rather than apart.

• If both you and Larry each arrive at Legends, your payoff is 7 and Larry's payoff is 12.
• If both you and Larry each arrive at Papa Del's, Larry's payoff is 6 but your payoff is 14.
• If you go to Legends and Larry goes to Papa Del's, your payoff is 3 and Larry's payoff is 4.
• If you go to Papa Del's and Larry goes to Legend's, your payoff is 4and Larry's payoff is 2.

If it helps, you can think of these payoffs as units of enjoyment or utility you and your friend derive from the outcomes. (As you recall, while firms maximize profits, individuals maximize utility). Assume that this is a single-play, non-repeated game.

1. Construct a payoff matrix with two choices for each player: L (for Legends strategy) and PD (for Papa Del's strategy). Fill the cells with the correct payoffs. Please put yourself on top and Larry on the left side of your payoff matrix. (6 points)

1. Do you have a dominant strategy? Explain. (6 points)

1. Does your friend Larry have a dominant strategy? Explain. (6 points)

1. Of the 4 possible outcomes, identify which one(s), if any, satisfy the conditions of a Nash Equilibrium. Explain your logic. (7 points)