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corie corie
wrote...
Posts: 767
6 years ago
Consider the following game that represents the payoffs from different advertising campaigns (low, medium, and high spending) for two political candidates that are running for a particular office.  The values in the payoff matrix represent the share of the popular vote earned by each candidate:

   Candidate B - low   Candidate B - medium   Candidate B - high
Candidate A - low   50, 50   40, 60   20, 80
Candidate A - medium   60, 40   50, 50   35, 65
Candidate A - high   80, 20   65, 35   50, 50

Under the version of the game with simultaneous moves, what is the Nash equilibrium?
A) Neither candidate has a dominant strategy, but the Nash equilibrium occurs where both candidates use medium advertising campaigns.
B) Candidate A's dominant strategy is high, Candidate B's dominant strategy is high, and this is the Nash equilibrium.
C) Neither candidate has a dominant strategy, but the Nash equilibrium occurs where both candidates use high advertising campaigns.
D) There is no Nash equilibrium (in pure strategies) for this simultaneous game.
Textbook 
Microeconomics

Microeconomics


Edition: 8th
Author:
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