Can you help me with the question below?What is [are] the Nash Equilibrium [Equilibria] of this game?A) (10;10) and (20;20)B) (30;30)C) (10;20) and (20;10)D) (20;20)E) (30;30) Pl 2Pl 110202000; 20001700; 22001500; 23001550; 17502200 ; 17001800; 18002300; 15001500 15001750; 155030102030

Answered: Pl 2 Pl 1 10 20 2000; 2000 1700; 2200…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Can you help me with the question below?

What is [are] the Nash Equilibrium [Equilibria] of this game?

A) (10;10) and (20;20)

B) (30;30)

C) (10;20) and (20;10)

D) (20;20)

E) (30;30)

Pl 2
Pl 1
10
20
2000; 2000
1700; 2200
1500; 2300
1550; 1750
2200 ; 1700
1800; 1800
2300; 1500
1500 1500
1750; 1550
30
10
20
30

Expert Solution

Step 1

Table 1 shows the game.

Table 1
20
Player 1(R)/ Player 2 (C)
10
30
2,000/2,000
2,200/1,700
2,300/1,500
1,700/2,200
1,800/1,800
1,750/1,550
1,500/2,300
1,550/1,750
1,500/1,500
10
20
30

Step 2

Nash equilibrium can be calculated by using the iterative elimination method as follows.

For player 2, all the essentials of column 20 are superior to the essentials of column 10. Therefore, column 10 can be eliminate.

For player 1, all the essentials of row 20 are superior to the elements of row 30. Therefore, the row 30 can be eliminate. Then, the new matrix of this game can be derived as follows.

Table 2
Player 1/player 2
20
30
1,700/2,200
1,800/1,800
1,500/2,300
1,550/1,750
10
20

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