Question

Which of the following is true for a Nash equilibrium of a two-player game? a) The...

Which of the following is true for a Nash equilibrium of a two-player game?

a) The joint payoffs of the two players are highest compared to other strategy pairs.

b) It is a combination of strategies that are best responses to each other.*?

c) Every two-player game has a unique Nash equilibrium.

d) None of the above is correct.

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Homework Answers

Answer #1

Nash equilibrium has following characteristics -:

1. A Nash equilibrium is consists of strategies that has been the best response of each player relative to strategy adopted by other.

2. A Nash equilibrium consists of strategies that indicates the profit-maximizing strategy of each player given the strategy of other players.

3. A Nash equilibrium consists of strategies from which no player will deviate resulting in a stable and unique equilibrium.

Thus,

The true aspect of a Nash equilibrium of a two-player game is that it is a combination of strategies that are best response to each other.

Hence, the correct answer is the option (b).

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