Asked by Liezel Paglinawan on Jun 12, 2024
Verified
Big Pig and Little Pig have two possible strategies, Press the Button, and Wait at the Trough.If both pigs choose Wait, both get 3.If both pigs Press the Button, then Big Pig gets 9 and Little Pig gets 1.If Little Pig Presses the Button and Big Pig Waits at the Trough, then Big Pig gets 10 and Little Pig gets 0.Finally, if Big Pig Presses the Button and Little Pig Waits, then Big Pig gets 4 and Little Pig gets 1.In Nash equilibrium,
A) Little Pig will get a payoff of 1 and Big Pig will get a payoff of 4.
B) Little Pig will get a payoff of 1 and Big Pig will get a payoff of 9.
C) both pigs will wait at the trough.
D) Little Pig will get a payoff of zero.
E) the pigs must be using mixed strategies.
Nash Equilibrium
A situation in game theory where no player can benefit by unilaterally changing their strategy, assuming the other players' strategies remain unchanged.
Press Button
A simple mechanical or electronic device that is pressed to activate or control a mechanism or system.
Payoff
The return or reward received from an investment or action, often used in the context of games and economic scenarios.
- Gain proficiency in understanding Nash equilibrium in diverse strategic situations.
- Examine the consequences in games under diverse strategy frameworks.
Verified Answer
PS
Patrycja SzymikJun 14, 2024
Final Answer :
A
Explanation :
In Nash equilibrium, each player's strategy is the best response to the other player's strategy. Here, if Little Pig chooses to Wait, Big Pig's best response is to Press the Button, resulting in a payoff of 4 for Big Pig and 1 for Little Pig. This outcome is stable because neither pig has an incentive to deviate from their chosen strategy, given the strategy of the other.
Learning Objectives
- Gain proficiency in understanding Nash equilibrium in diverse strategic situations.
- Examine the consequences in games under diverse strategy frameworks.