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Game Strategy

In: Business and Management

Submitted By landy21
Words 676
Pages 3
1. Some games of strategy are cooperative. One example is deciding which side of the road to drive on. It doesn’t matter which side it is as long as everyone chooses the same side. Otherwise, everyone may get hurt. Driver 2 Left Right
Driver 1 Left 0,0 -1000 -1000 Right -1000, -1000 0,0

a.Does either player have a dominant strategy? Explain.
There is no dominant strategy in this game. It is not a prisoners dilemma, one of the drivers can not choose a strategy that is best for them regardless of what strategy the other driver chooses. It is in both drivers interest to cooperate and coordinate among themselves to use the same strategy so that they come to the best outcome for both.

b.Is there Nash equilibrium in this game? Explain
There are two Nash equilibriums in this game: both drivers drive on the left or both drive on the right side of the road. The two drivers have to decide whether to drive on the left or on the right side of the road and avoid any accidents. Nash equilibrium occurs when both driver 1 and driver 2 choose the same strategy, both driving on the left or both driving on the right side of the road. If driver 1 decides to drive on the left and driver 2 coming from the opposite direction decides to drive on his or her left, they pass each other without any incidents, so the cost to each of them is zero. However, if driver 2 decides to drive on his or her right side when driver 1 is driving on the left, the cars will collide and the cost will be 1,000, which may be the cost of collision. But if they both decide to drive on the right side of the road they will avoid a collision and the cost will be zero. It does not matter which side both…...

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