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Consider two students, Jaeho and Lawrence. Both students are taking an exam in their math class this week and they are both, independently, trying to decide whether they will conceal their answers or reveal their answers while working on the exam. It takes time and effort to conceal answers so both students realize that revealing their answers will allow them to concentrate more fully on the exam. In addition, they both realize that if the other student reveals their answers they may potentially improve their scores. Jaeho knows that he is conceals his answers he will get a 60 on the exam and if he does not conceal his answers he will get a 65 provided that Lawrence conceals his answers. Jaeho knows that he will make a 75 on the exam if he conceals his answers while Lawrence reveals his answers; Jaeho will make an 80 on the exam if both Jaeho and Lawrence do not conceal their answers. Lawrence believes he will make an 80 on the exam he both students conceal their answers, an 85 on the exam if he conceals his answers while Jaeho reveals his answers, an 85 on the exam if he reveals his answers while Jaeho does not reveal his answers, and an 87 on the exam if both students do not conceal their answers.
a. Construct a payoff matrix for Jaeho and Lawrence. In the payoff matrix identify the two strategies that both students face and then enter their payoffs with Jaeho's payoff the first number and Lawrence's payoff the second number. Label this payoff matrix fully and completely.
b. Does Jaeho have a dominant strategy with regard to concealing or revealing his answers? Explain your answer.
c. Does Lawrence have a dominant strategy with regard to concealing or revealing his answers? Explain your answer.
d. What do you predict will be Jaeho's and Lawrence's scores on the exam? Explain your answer.
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