Question

Solving for dominant strategies and the Nash equilibrium Suppose Gilberto and Juanita are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Gilberto chooses Right and Juanita chooses Right, Gilberto will receive a payoff of 3, and Juanita will receive a payoff of 7.

Juanita



Left Right



Gilberto



Left 4, 6 6, 8



Right 7, 5 3, 7



The only dominant strategy in this game is for _____ to choose _____ . The outcome reflecting the unique Nash equilibrium in this game is as follows: Gilberto chooses _____ and Juanita chooses ____ .

Answer 1

The only dominant strategy in this game is for Juanita to choose left since it is the best response of Juniata irrespective of what Gilberto does.

Gilberto chooses left and Juanita chooses left.

Explanation:

Gilberto appears to know Juniata's left to choose. So Gilberto opts for Left to maximize its return on investment. The technique is superior if the approach gives a participant a greater payout than just about any other player, no matter what any player does.

Therefore, the effect is.

When Juanita chooses his winning approach, it is the safest option for Gilberto to left.