What is expected payoff to each player if each flips a coin

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Reference no: EM13873802

Suppose two players, A and B, select from three different numbers, l, 2, and 3. Both players get dollar prizes if their choices match, as indicated in the following table.

 

B

1

2

3

 

A

1

10,10

0,0

0,0

2

0,0

15,15

0,0

3

0,0

0,0

15,15

(a) What are the Nash equilibria of this game? Which, if any, is likely to emerge as the (focal) outcome? Explain.

(b) Consider a slightly changed game in which the choices are again just n umbers bu t the two cells with (15, 15) in the table become (25, 25). What is the expected (average) payoff to each player if each flips a coin to decide whether to play 2 or 3? ls this better than focusing on both choosing l as a focal equilibrium? How should you account for the risk that A might do one thing while B does the other?

Reference no: EM13873802

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