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2. Consider the game of two people approaching one another on a sidewalk. Each chooses right or left. If they make the same choice, they pass one another without a problem and each gets a payoff of 1. If they make opposite choices, they both get payoffs of 0. Find the three Nash equilibria of the game. (One of them is a mixed equilibrium.) Show that the payoff from the mixed equilibrium is only half as good for either player as either of the two pure equilibria.

2. Consider the game of two people approaching one another on a sidewalk. Each chooses right or left. If they make the same choice, they pass one another without a problem and each gets a payoff of 1. If they make opposite choices, they both get payoffs of 0. Find the three Nash equilibria of the game. (One of them is a mixed equilibrium.) Show that the payoff from the mixed equilibrium is only half as good for either player as either of the two pure equilibria.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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2. Consider the game of two people approaching one another on a sidewalk. Each chooses right or left. If they make the same choice, they pass one another without a problem and each gets a payoff of 1. If they make opposite choices, they both get payoffs of 0. Find the three Nash equilibria of the game. (One of them is a mixed equilibrium.) Show that the payoff from the mixed equilibrium is only half as good for either player as either of the two pure equilibria.
Transcribed Image Text:2. Consider the game of two people approaching one another on a sidewalk. Each chooses right or left. If they make the same choice, they pass one another without a problem and each gets a payoff of 1. If they make opposite choices, they both get payoffs of 0. Find the three Nash equilibria of the game. (One of them is a mixed equilibrium.) Show that the payoff from the mixed equilibrium is only half as good for either player as either of the two pure equilibria.
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