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Business, 05.05.2020 17:21 ohgeezy

Suppose Tim and Alyssa 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 Tim chooses Right and Alyssa chooses Right, Tim will receive a payoff of 9 and Alyssa will receive a payoff of 5.

Alyssa

Left Right

Tim Left 6, 6 8, 5

Right 3, 6 9, 5

The only dominant strategy in this game is for to choose .

The outcome reflecting the unique Nash equilibrium in this game is as follows: Tim chooses and Alyssa chooses

Alyssa

Left Right

6,6 8,5

3,6 9,5

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