
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.
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.
Chapter 65 Solutions
Krugman's Economics For The Ap® Course
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