0
$\begingroup$

|

| |Adv| ---------|N\A|

Adv| 300,300 | 900,0 |

N\A| 0,900 | 700,700 |

Player 1= Pepsi

Player 2= Coke

A) Solve for the pure strategy Nash equilibrium

B) Is this game a prisoner's Dilema?

C) Is there a cooperative equilibrium? If so, what is it?

D) Does coke have a dominant strategy? Does Pepsi?

My Attempt


| |Adv| ---------|N\A|

Adv| (300),(300) | (900),0 |

N\A| 0,(900) | 700,700 |

A) Nash Equilibrium: (Adv, Adv)

B) Not sure how to answer this

C) Yes. If they both got in contact and made the option to not advertise

D)

I would appreciate some help!

$\endgroup$
  • $\begingroup$ You need to put in more effort. What exactly are you having trouble with? Simply writing a few sentences doesn't really help. I'd also reccomend cleaning up your formatting a bit. $\endgroup$ – TheSaint321 May 11 '17 at 0:12
3
$\begingroup$

Here are a couple hints for the two that you haven't answered:

The prisoner's dilemma is characterized by the inability to sustain the Pareto optimal payoff as a Nash Equilibrium due to the existence of a profitable deviation for both players. Each player has a dominant strategy to "Defect" and so the unique Nash Equilibrium is one where both players "Defect". Does that hold here?

A (possibly mixed) strategy $a$ (weakly) dominates another strategy $b$ for a given player $i$ if player $i$ (weakly) prefers playing $a$ to $b$ for any strategy vector of the other players. In your case, there is just one other player, $j$, and so $i$ simply has to prefer $a$ to $b$ for any strategy played by player $j$.

You just need to see if that holds for your two players.

$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.