C) Two people are suspected of robbing a bank. They are being interrogated in separate rooms. If both stay silent, they can be convicted of a lesser crime and sentenced to only 8 months. If one agreeds to confess that they did it together, he can plea bargain a suspended sentence while the other is convicted to 5 years in prison. If both confess that they did it together, each will receive a 3 year prison term. Create a payoff matrix from the point of view of the first suspect. Find the Nash equilibrium strategies for both suspects in this game.

C) Two people are suspected of robbing a bank. They are being interrogated in separate rooms. If both stay silent, they can be convicted of a lesser crime and sentenced to only 8 months. If one agreeds to confess that they did it together, he can plea bargain a suspended sentence while the other is convicted to 5 years in prison. If both confess that they did it together, each will receive a 3 year prison term. Create a payoff matrix from the point of view of the first suspect. Find the Nash equilibrium strategies for both suspects in 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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