Suppose Alice and Bill make their decisions separately and simultaneously, so that each must decide what to do knowing the available choices and payoffs but not what the other has actually chosen. How many potential equilibria are there? (Hint: To see whether a given combination of strategies is an equilibrium, ask whether either player could get a higher payoff by changing his or her strategy.)

Question

Fiona

Mathematics

24 May, 17:20

Suppose Alice and Bill make their decisions separately and simultaneously, so that each must decide what to do knowing the available choices and payoffs but not what the other has actually chosen. How many potential equilibria are there? (Hint: To see whether a given combination of strategies is an equilibrium, ask whether either player could get a higher payoff by changing his or her strategy.)

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Answers (1)

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Jacey Petersen · Answer 1

There are two possible equilibrium.

Step-by-step explanation:

Both of them either buy movie tickets or baseball tickets, because then changing the preference can result in lower payoffs.