Question

Question 1.

Put the following game into the normal form. That is, describe the set of players, the strategy sets for each player, the payoff functions, and draw the game in matrix form. What do you expect

would happen in this game, and why?Two kids are playing a game of Chicken. In this game, they ride their bikes as fast as theycan at each other. The one to swerve or turn out of the way loses, he is a Chicken and will getteased by his friends, while the kid who keeps going straight wins, and gets to brag about his victory.However, if neither kid swerves, they will crash into each other, which will hurt a lot more thanbeing teased. If both kids swerve, then nobody is hurt or teased, but also nobody wins. The kidsprefer winning to losing, but prefer both winning and losing as preferable to crashing.Let each player have two options: Swerve and Straight.

Let the payoff of winning be 10, the payoff of losing be -1, the payoff to neither winning orl losing be 0, and the payoff of crashing be -10

Answer 1

There are two sets of players Kid 1 and Kid 2, They have two strategies each to swerve or to go straight. The below table represents the game in the matrix form and shows the payoff each player has.

If both the players chose to go straight they have a payoff of -10 each and if they both swerve they have a payoff of 00. If one player swerve and other remains straight the person remaining straight will get 10 and the other loosing will get -1.

As per the matrix given above they both will crash and get an end payoff of -10. Both the players will try to gain maximum and stay straight thereby end up crashing and getting -10 each. But, as the question suggests they prefer loosing to crashing both the players will swerve and nobody will win this game. End payoffs will be 00.