1. Consider two workers 1 and 2 who simultaneously must choose between working on two projects,labelled A and B. The payoffs are as follows. If both 1 and 2 choose project A each worker gets 0.Similarly, if both workers choose B each gets 0. If worker 1 chooses B and worker 2 chooses A, eachgets 10 and 3 (for worker 1 and 2) respectively. Finally, if 1 opts for A and worker 2 opts for B thepayoffs to worker 1 and 2 are 8 and 7, respectively.a. What are the Nash equilibria of the game? Is this game a realistic one for an organisation? Explainyour answer. What might an organisation do if it found itself in a situation similar to the onerepresented by this game.

Nash Equilibrium describes a situation where all players in a game have chosen their best strategy,…

a. What are the Nash equilibria of the game? Is this game a realistic one for an organisation? Explain your answer. What might an organisation do if it found itself in a situation similar to the one represented by this game.

a. What are the Nash equilibria of the game? Is this game a realistic one for an organisation? Explain your answer. What might an organisation do if it found itself in a situation similar to the one represented by this game.

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

1. Consider two workers 1 and 2 who simultaneously must choose between working on two projects,
labelled A and B. The payoffs are as follows. If both 1 and 2 choose project A each worker gets 0.
Similarly, if both workers choose B each gets 0. If worker 1 chooses B and worker 2 chooses A, each
gets 10 and 3 (for worker 1 and 2) respectively. Finally, if 1 opts for A and worker 2 opts for B the
payoffs to worker 1 and 2 are 8 and 7, respectively.
a. What are the Nash equilibria of the game? Is this game a realistic one for an organisation? Explain
your answer. What might an organisation do if it found itself in a situation similar to the one
represented by this game.

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Step 1: Introduce the concept of Nash Equilibrium.

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Step 2: Determine the Nash equilibria of the game.

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Step 3: Determine whether the game is realistic one for an organisation and what might an organisation do

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