Consider the following game where two players have to decide if they want to buy a movie ticket or a baseball ticket. They have the highest payoffs when they both buy tickets to the same activity, but must decide simultaneously what to buy without knowing what the other person will do. a. Does either player have a dominant strategy? b. How many equilibria does this game have? c. Is this an example of a prisoner’s dilemma? Explain. d. What will be the outcome if your friend buys their ticket first and you can observe their choice?
Consider the following game where two players have to decide if they want to buy a movie ticket or a baseball ticket. They have the highest payoffs when they both buy tickets to the same activity, but must decide simultaneously what to buy without knowing what the other person will do. a. Does either player have a dominant strategy? b. How many equilibria does this game have? c. Is this an example of a prisoner’s dilemma? Explain. d. What will be the outcome if your friend buys their ticket first and you can observe their choice?
Chapter1: What Economics Is About
Section: Chapter Questions
Problem 14QP
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Consider the following game where two players have to decide if they want to buy a movie ticket or a baseball ticket. They have the highest payoffs when they both buy tickets to the same activity, but must decide simultaneously what to buy without knowing what the other person will do.
a. Does either player have a dominant strategy?
b. How many equilibria does this game have?
c. Is this an example of a prisoner’s dilemma? Explain.
d. What will be the outcome if your friend buys their ticket first and you can observe their choice?
Transcribed Image Text:You→
Friend
Movie Baseball
Movie 3
Baseball 1
2
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Step 1: Define Nash equilibrium.
VIEWStep 2: Explain does either player have a dominant strategy?
VIEWStep 3: Explain How many equilibria does this game have?
VIEWStep 4: Explain is this an example of a prisoner’s dilemma?
VIEWStep 5: Explain the outcome if your friend buys their ticket first and you can observe their choice.
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