Question

Will and Grace have adjoining unfenced back yards and each has just adopted a new puppy. Will values a fence between their yards at $250 and Grace values a fence between their yards at $200. The cost of building the fence is $300, which will be split equally if they both agree to build the fence. Therefore, their payoff matrix is as follows.Will's dominant strategy in this game is to:

Answer 1

Not build the fence

Step-by-step explanation:

If Will decides to build the fence, then Grace will earn a higher payoff by not helping to build the fence, and if Will decides to not build the fence, then Grace will earn a higher payoff by also not building the fence.

Equilibrium = No fence