Consider the payoff matrix below, which describes a symmetric A B A 17,17 0,14 B 14,0 8,8 (a) Find all Nash equilibria of this game, including any mixed strategy equilibria. (b) Draw the expected payoff difference diagram for this game, including all the Nash equilibria you found in (a). (c) What would you expect to occur most frequently when this game is played as a lab experiment? Justify your answer using your answers from (a) and (b).

Consider the payoff matrix below, which describes a symmetric A B A 17,17 0,14 B 14,0 8,8 (a) Find all Nash equilibria of this game, including any mixed strategy equilibria. (b) Draw the expected payoff difference diagram for this game, including all the Nash equilibria you found in (a). (c) What would you expect to occur most frequently when this game is played as a lab experiment? Justify your answer using your answers from (a) and (b).

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.9P

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Question

Consider the payoff matrix below, which describes a symmetric
A
B
A
17,17
0,14
B 14,0 8,8
(a) Find all Nash equilibria of this game, including any mixed strategy
equilibria.
(b) Draw the expected payoff difference diagram for this game, including
all the Nash equilibria you found in (a).
is
(c) What would you expect to occur most frequently when this game
played as a lab experiment? Justify your answer using your answers
from (a) and (b).

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Step 1: State the given information

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Step 2: a) Find Pure Strategy Nash Equilibria

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Step 3: a) Find Mixed Strategy Nash Equilibria

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Step 4: b) Draw expected payoff difference diagram

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Step 5: c) Discuss the expected outcome of the game if played as a lab experiment

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