Microeconomics
Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
Question
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Chapter 20, Problem 5IP

(a)

To determine

The Nash equilibrium of an average game.

(b)

To determine

The expectation of the equilibrium to approach the Nash equilibrium, if a class plays the average game.

(c)

To determine

The difference if the equilibrium in playing the real-world game is not the Nash equilibrium.

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Students have asked these similar questions
You have just played rock, paper, scissors with your friend. You chose scissors and he chose paper, so you won. Is this a Nash equilibrium? Explain why or why not.
Use the following payoff matrix for a one-shot game to answer the accompanying questions. a. Determine the Nash equilibrium outcomes that arise if the players make decisions independently, simultaneously, and without any communication. Which of these outcomes would you consider most likely? Explain. b. Suppose player 1 is permitted to “communicate” by uttering one syllable before the players simultaneously and independently make their decisions. What should player 1 utter, and what outcome do you think would occur as a result? c. Suppose player 2 can choose its strategy before player 1, that player 1 observes player 2’s choice before making her decision, and that this move structure is known by both players. What outcome would you expect? Explain.
Nash equilibrium refers to the optimal outcome of a game where there is no incentive for the players to deviate from their initial strategy. An individual (or player) can receive no incremental benefit from changing actions, assuming other players remain constant in their strategies. Given this premise, can there be a no Nash equilibrium?
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