Suppose Russell and Aaliyah are playing a game that requires both to simultaneously choose an action: Up or Down. The payoff matrix that follows shows the earnings of each person as a function of both of their choices. For example, the upper-right cell shows that if Russell chooses Up and Aaliyah chooses Down, Russell will receive a payoff of 6 and Aaliyah will receive a payoff of 8. Aaliyah Up Up 4,6 Down 6,8 Russell Down 7,5 3,7 In this game, the only dominant strategy is for to choose The outcome reflecting the unique Nash equilibrium in this game is as follows: Russell chooses ✓ and Aaliyah chooses
Suppose Russell and Aaliyah are playing a game that requires both to simultaneously choose an action: Up or Down. The payoff matrix that follows shows the earnings of each person as a function of both of their choices. For example, the upper-right cell shows that if Russell chooses Up and Aaliyah chooses Down, Russell will receive a payoff of 6 and Aaliyah will receive a payoff of 8. Aaliyah Up Up 4,6 Down 6,8 Russell Down 7,5 3,7 In this game, the only dominant strategy is for to choose The outcome reflecting the unique Nash equilibrium in this game is as follows: Russell chooses ✓ and Aaliyah chooses
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:Suppose Russell and Aaliyah are playing a game that requires both to simultaneously choose an
action: Up or Down. The payoff matrix that follows shows the earnings of each person as a
function of both of their choices. For example, the upper-right cell shows that if Russell chooses Up
and Aaliyah chooses Down, Russell will receive a payoff of 6 and Aaliyah will receive a payoff of 8.
Aaliyah
Up
Up 4,6
Down
6,8
Russell
Down 7,5 3,7
In this game, the only dominant strategy is for
to choose
The outcome reflecting the unique Nash equilibrium in this game is as follows: Russell
chooses
✓ and Aaliyah chooses
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