2. Jack and Jill want a treehouse to play in. They have to decide simultaneously whether to build or not to build. Each individual who builds bears a cost of 3. They both have access to the treehouse once it is built. If only one of them builds the treehouse, they each derive a utility of 2. If both of them build the treehouse, they each derive a utility of 4 (presumably the treehouse is more elaborate because two heads are better than one). If the treehouse is not built, they each derive a utility of 0. (a) Draw the payoff matrix. (b) What is Jack's strategy? What is Jill's strategy? What is the Nash equilibrium or equilibria? (c) Does this game resemble the prisoner's dilemma, the battle of the sexes, or chicken? Explain. iding whether

2. Jack and Jill want a treehouse to play in. They have to decide simultaneously whether to build or not to build. Each individual who builds bears a cost of 3. They both have access to the treehouse once it is built. If only one of them builds the treehouse, they each derive a utility of 2. If both of them build the treehouse, they each derive a utility of 4 (presumably the treehouse is more elaborate because two heads are better than one). If the treehouse is not built, they each derive a utility of 0. (a) Draw the payoff matrix. (b) What is Jack's strategy? What is Jill's strategy? What is the Nash equilibrium or equilibria? (c) Does this game resemble the prisoner's dilemma, the battle of the sexes, or chicken? Explain. iding whether

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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(c)
2. Jack and Jill want a treehouse to play in. They have to decide simultaneously whether
to build or not to build. Each individual who builds bears a cost of 3. They both have
access to the treehouse once it is built. If only one of them builds the treehouse, they
each derive a utility of 2. If both of them build the treehouse, they each derive a utility
of 4 (presumably the treehouse is more elaborate because two heads are better than
one). If the treehouse is not built, they each derive a utility of 0.
(a) Draw the payoff matrix.
(b) What is Jack's strategy? What is Jill's strategy? What is the Nash equilibrium or
equilibria?
(c) Does this game resemble the prisoner's dilemma, the battle of the sexes, or chicken?
Explain.
--hothar Sam is deciding whether

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