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Microeconomics 2nd Edition by Douglas Bernheim
Edition 2ISBN: 978-0071287616Microeconomics 2nd Edition by Douglas Bernheim
Edition 2ISBN: 978-0071287616 Exercise 1
Bob and Brian square off for the World Rock Paper Scissors Championship. The winner will take home $10,000, the loser receives nothing, and they split the prize in the event of a tie. Draw a table (like Figure 12.1) showing the players' possible choices, and the payoffs that result from each pair of actions.
Figure 12.1 The Battle of Wits. This table contains one row for each of Wesley's alternatives and one column for each of Vizzini's. Each cell corresponds to a pair of strategies. In the yellow cell, for example, Wesley chooses the left goblet and Vizzini chooses the right one. The number in the southwest half of each cell indicates Wesley's prize (or penalty); the number in the northeast half indicates Vizzini's.
Figure 12.1 The Battle of Wits. This table contains one row for each of Wesley's alternatives and one column for each of Vizzini's. Each cell corresponds to a pair of strategies. In the yellow cell, for example, Wesley chooses the left goblet and Vizzini chooses the right one. The number in the southwest half of each cell indicates Wesley's prize (or penalty); the number in the northeast half indicates Vizzini's.
Explanation
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Payoff matrix:
The payoff mat...
Microeconomics 2nd Edition by Douglas Bernheim
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