Suppose Dmitri and Frances are playing a game in which both must simultaneously

Question

Suppose Dmitri and Frances are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Dmitri chooses Right and Frances chooses Right, Dmitri will receive a payoff of 7 and Frances will receive a payoff of 4.

The only dominant strategy in this game is for   to choose   .

The outcome reflecting the unique Nash equilibrium in this game is as follows: Dmitri chooses   and Frances chooses   .

Explanation / Answer

The only dominant strategy is for Frances to choose Right. This is because he would choose right irrespective of what Dmitri plays.

Nash equilirium is when both players choose right because non of them will have an incentive to deviate.

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