Question

		Mark
		A	B
Cindy	A	Mark: 10 Cindy: 10	Mark: 2 Cindy: 80
	B	Mark: 80 Cindy: 2	Mark: 50 Cindy: 50

a.      What is the nash equilibrium of this game? (Be sure to specify the strategy each player chooses).

b.      Does Cindy have a dominant strategy why or why not?

c.      Does Mark have a dominant strategy why or why not?

d.      Is this an example of the prisoner’s dilemma game why or why not?

Answer 1

Nash equilibrium is the strategy that is adopted by both the players as their best response function given the response of the rival. In this case the Nash equilibrium is when cindy and Mark both select strategy A. This is true because both of them have a dominant strategy of selecting A

Cindy has a higher profit of 10 in comparison to a profit of 2 when Mark is selecting A. So Cindy will select A when Mark selects A. Cindy again select A even when Mark select B because for profit is greater at it in comparison to 50 when she select B.

The same condition is also true for Mark because the game is symmetric. Therefore Mark also has a dominant strategy of selecting A

This game is an example of prisoner's dilemma game because in the prisoner's dilemma game the two players always select a lower out come as they have a dominant strategy even when a higher payoff strategy is available and that can be sustained if communication is allowed or collision is possible. In this case if both of them are selecting the strategy B they are getting a payoff of 50 but they do not select B and instead select a lower outcome at strategy A