How would I create a game theory payoff matrix with a home buyer and a home...

How would I create a game theory payoff matrix with a home buyer and a home seller where the seller can accept, reject, or counteroffer and the home buyer can make an offer or make no offer? Any payoff in dollars is fine, just need to know how to figure this out.

Expert Solution

In game theory, a payoff matrix is a table in which strategies of one player are listed in rows and those of the other player in columns and the cells show payoffs to each player such that the payoff of the row player is listed first. In other words It is a visual representation of all the possible strategies and all of the possible outcomes.

Since here there are two players, home seller and home buyer, where seller has three stretigies and buyer has two. So we will get a 3*2 matrices.

This may be shown as -

Rahul Sunny answered 2 years ago

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