Question

Fill in a payoff matrix for a prisoner’s dilemma game where one player has a dominant...

Fill in a payoff matrix for a prisoner’s dilemma game where one player has a dominant strategy and the other doesn’t. Firm 2 in Duopoly Firm 1 in Duopoly

a. Explain the dominant and non-dominant strategy of the firms.

b. Is there a Nash equilibrium in your game? Explain.

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Answer #1

Step by step solution is provided in the pic attached here.

If firm B chooses to stay stay silent,firm A will choose to betray.And if firm B chooses to betray,firm 1 will choose to stay silent.So, no dominant strategy for firm A.

Note that you can replace firm A with prisoner A and firm B with prisoner B in this solution,if you want to talk specifically about prisoners dilemma game.

If you have any doubt , feel free to ask.

Don't forget to thumbs up , if you like the solution.

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