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Business, 22.04.2020 01:34 chyg304

Suppose Lorenzo and Neha are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Lorenzo chooses Right and Neha chooses Right, Lorenzo will receive a payoff of 6 and Neha will receive a payoff of

Neha
Left Right
Lorenzo Left 8, 4 4, 5
Right 5, 4 6, 5

The only dominant strategy in this game is for (Neha/Lorenzo) to choose (Right/Left)t.

The outcome reflecting the unique Nash equilibrium in this game is as follows:

Lorenzo chooses (Right/Left) and Neha chooses (Right/Left) .

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