Chapter 65, Problem 4MCQ

To determine

To choose: Person J’s action based on the payoff matrix.

Answer to Problem 4MCQ

Correct option is A i.e., Person J will confess whether or not Person R confessed.

Explanation of Solution

As per the payoff matrix given, Person J will confess whether or not Person R confesses as if Person J confesses, he will get a 2-year sentence when Person R doesn’t confess, Person R will get a 20-year sentence. So, here the benefit of confessing is more than that of not confessing.

In case Person J does not confess and Person R also does not confess both will get an equal sentence of 5 years.

In case Person R confesses and Person J does not confess: Person J gets a 20year sentence and Person R gets only 2 years sentence.

Finally, if both of them confess: both will get an equal sentence of 15 years.

So, considering all the above scenarios Person J should confess whether or not Person R confessed.

Economics Concept Introduction

Introduction:

Nash equilibrium states that each player in a game selects an action that will maximize the payoff, given the actions of other players in the game. This is also known as non-cooperative equilibrium.