**Game Theory Payoff Matrix Analysis**This table represents a payoff matrix for a strategic game involving two players, Player 1 and Player 2. The strategies available to each player are as follows:- **Player 1** can choose between "Up" and "Down."- **Player 2** can choose between "Left" and "Right."The payoffs for each combination of strategies are listed in the matrix, with the first number representing Player 1's payoff and the second number representing Player 2's payoff.### Payoff Matrix:| | **Player 2: Left** | **Player 2: Right** ||-------------|--------------------|---------------------|| **Player 1: Up** | P1: $15, P2: $15 | P1: $11, P2: $16 || **Player 1: Down** | P1: $12, P2: $18 | P1: $13, P2: $13 |### Analysis:Below the matrix is a checklist asking which strategies are dominant:- **Up is a dominant strategy for Player 1**- **Down is a dominant strategy for Player 1**- **Left is a dominant strategy for Player 2**- **Right is a dominant strategy for Player 2**- **There are no dominant strategies in this game**### Explanation:A strategy is dominant if it results in a higher payoff no matter what the other player chooses. The checklist invites the user to evaluate which (if any) strategies from the game exhibit this property.

Dominant strategy refers to the preferred outcome of a player over other options as the player always chooses this outcome irrespective of the decision of another player in the game.Here, if player 1 moves first and chooses up, player 2 will choose right. Similarly, if player 1 chooses down, player 2 wil choose left. Here, player 2 changes his decision due to change in player 1's strategy, which implies that player 2 does not have dominant strategy. At the same time, if players 2 moves first and chooses left, ayer 1 will choose up. Similarly, if player 2 chooses right, player 1 will choose down. Here, player 1 changes his outcome with the change in the action of player 2. As a result, player 1 does not have dominant strategy. Hence, the correct option is: e. There is no dominant strategies in this game.

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Player 1 ооооо Up Down List all dominant strategies in the game shown above Up is a dominant strategy for player 1 Down is a dominant strategy for player 1 Left is a dominant strategy for player 2 Right is a dominant strategy for player 2 There are no dominant strategies in this game Player 2 Left P1: $15 P2: $15 P1: $12 P2:$18 Right P1:$11 P2: $16 P1: $13 P2: $13

Player 1 ооооо Up Down List all dominant strategies in the game shown above Up is a dominant strategy for player 1 Down is a dominant strategy for player 1 Left is a dominant strategy for player 2 Right is a dominant strategy for player 2 There are no dominant strategies in this game Player 2 Left P1: $15 P2: $15 P1: $12 P2:$18 Right P1:$11 P2: $16 P1: $13 P2: $13

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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