Suppose Ishmael and Santiago are the only two fishermen who fish in Lake Hardin. Each must choose between fishing for 20 hours per week or for 40 hours per week. If both choose to fish for 20 hours per week, then each can earn a profit of $3,000 per week. If both choose to fish for 40 hours per week, then each can earn a profit of $2,000 per week. If Santiago fishes for 40 hours per week, and Ishmael fishes for 20 hours per week, then Santiago can earn a profit of $4,000 per week, and Ishmael can earn a profit of $1,000 per week. If Ishmael fishes for 40 hours per week, and Santi
Suppose Ishmael and Santiago are the only two fishermen who fish in Lake Hardin. Each must choose between fishing for 20 hours per week or for 40 hours per week. If both choose to fish for 20 hours per week, then each can earn a profit of $3,000 per week. If both choose to fish for 40 hours per week, then each can earn a profit of $2,000 per week. If Santiago fishes for 40 hours per week, and Ishmael fishes for 20 hours per week, then Santiago can earn a profit of $4,000 per week, and Ishmael can earn a profit of $1,000 per week. If Ishmael fishes for 40 hours per week, and Santiago fishes for 20 hours per week, then Ishmael can earn a profit of $4,000 per week, and Santiago can earn a profit of $1,000 per week.
a. Construct the weekly payoff matrix for this situation.
| Ishmael | |||
|---|---|---|---|
| 20 Hours | 40 Hours | ||
| Santiago | 20 Hours | $ for Santiago $ for Ishmael |
$ for Santiago $ for Ishmael |
| 40 Hours | $ for Santiago $ for Ishmael |
$ for Santiago $ for Ishmael |
b. What is the equilibrium outcome of this game?
multiple choice 1
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Both men will fish for 40 hours per week.
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Both men will fish for 20 hours per week.
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Santiago will fish for 40 hours per week, and Ishmael will fish for 20 hours per week.
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Ishmael will fish for 40 hours per week, and Santiago will fish for 20 hours per week.
c. Is this game a prisoner's dilemma?
multiple choice 2
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Yes.
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No.
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