Eva and Ethan love attending sports events, especially when they go together. However, Eva prefers watching field hockey while Ethan would rather go to a cricket match. If they go together, the payoff is higher for the person who favors the sports event more (payoff = 3), and less for the other person (payoff = 2). If they attend the events alone, the payoff is smaller and the same for each (payoff = 1). Show the payoff matrix for this couple and deter- mine the Nash equilibria. How do the payoffs from the Nash equilibria compare?

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
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Chapter8: Game Theory
Section: Chapter Questions
Problem 8.7P
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Eva and Ethan love attending sports events, especially when they go together.
However, Eva prefers watching field hockey while Ethan would rather go to a cricket match. If
they go together, the payoff is higher for the person who favors the sports event more (payoff
= 3), and less for the other person (payoff = 2). If they attend the events alone, the payoff is
smaller and the same for each (payoff = 1). Show the payoff matrix for this couple and deter-
mine the Nash equilibria. How do the payoffs from the Nash equilibria compare?
Transcribed Image Text:Eva and Ethan love attending sports events, especially when they go together. However, Eva prefers watching field hockey while Ethan would rather go to a cricket match. If they go together, the payoff is higher for the person who favors the sports event more (payoff = 3), and less for the other person (payoff = 2). If they attend the events alone, the payoff is smaller and the same for each (payoff = 1). Show the payoff matrix for this couple and deter- mine the Nash equilibria. How do the payoffs from the Nash equilibria compare?
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