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.  In the Nash equilibrium of this game:

A. Will will build the fence by himself.
B. Will and Grace will both build the fence and split the cost.
C. no fence will be built.
D. the fence will be built, but it is uncertain who will build it.


Answer: C

Economics

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