Suppose Jordan and Lee are trying to decide what to do on a Friday. Jordan would prefer to see a comedy while Lee would prefer to see a documentary. One documentary and one comedy are showing at the local cinema. The payoffs they receive from seeing the films either together or separately are shown in the payoff matrix below. Both Jordan and Lee know the information contained in the payoff matrix. They purchase their tickets simultaneously, ignorant of the other's choice.
Which of the following statements is true?
A. The lower-left cell is the only Nash equilibrium.
B. Both the lower-left and upper right cells are Nash equilibria.
C. The upper-right cell is the only Nash equilibrium.
D. Both the upper-left and lower-right cells are Nash equilibria.
Answer: D
You might also like to view...
Regardless of what types of workers are available in different countries, unrestricted labor outsourcing always results in an equalization of wages across countries.
Answer the following statement true (T) or false (F)
Consider the hypothetical supply and demand of Kidneys.
Initially, kidneys are exchanged by donations only (price=0). If the government decides to legalize kidney sales and the market reaches equilibrium, then:
A. total surplus increases.
B. consumer surplus remains the same.
C. producer surplus remains the same.
D. a shortage of kidneys will arise.
Time-series forecasting models:
a. are useful whenever changes occur rapidly and wildly b. are more effective in making long-run forecasts than short-run forecasts c. are based solely on historical observations of the values of the variable being forecasted d. attempt to explain the underlying causal relationships which produce the observed outcome e. none of the above
Stagflation refers to a situation in which the economy is experiencing:
A. high economic growth and high inflation. B. low economic growth and high inflation. C. high economic growth and low inflation. D. low economic growth and low inflation.