A thug wants the contents of a safe and is threatening the owner, the only person who knows the code, to open the safe. The table shows the value that each person places on the various possible outcomes. Thug Safe's Owner Open the safe, thug does not kill 4 3 Open the safe, thug kills 2 1 Do not open, thug kills 1 Do not open, thug does not kill 3 4

A thug wants the contents of a safe and is threatening the owner, the only person who knows the code, to open the safe. The table shows the value that each person places on the various possible outcomes. Thug Safe's Owner Open the safe, thug does not kill 4 3 Open the safe, thug kills 2 1 Do not open, thug kills 1 Do not open, thug does not kill 3 4

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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A thug wants the contents of a safe and is threatening the owner, the only person who
knows the code, to open the safe. The table shows the value that each person places
on the various possible outcomes.
Thug
Safe's Owner
Open the safe, thug does
not kill
4
3
Open the safe, thug kills
2
1
Do not open, thug kills
1
Do not open, thug does
not kill
3
4
In the rollback equilibrium, the owner,
; and the thug
does not open the safe; kill
opens the safe; kill
opens the safe; does not kill
does not open the safe; does not kill
O O O O

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