Question

Two street races are playing a simultaneous game of chicken. They have to race towards each...

Two street races are playing a simultaneous game of chicken. They have to race towards each other and whoever swerves first is chicken and faces shame, a loss of 8, while the winner enjoys a gain of 3. If neither stop, they would crash into each other, a loss of 10. If both of them swerve at the same time, they are both chicken and face a loss of 5 each.

What would the Nash equilibrium be in this game?

a.

Both of the players would stop

b.

Player A stops

c.

Neither of the players would stop

d.

Player B stops

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