Question #46215

Consider the following payoff matrix:

1 2

1 $1,000 -$2,000

$2,000 -$1,000

Player A Strategy

-$1,000 $2,000

2 -$2,000 $1,000

a. Does Player A have a dominant strategy? Explain why or why not.

b. Does Player B have a dominant strategy? Explain why or why not.

1 2

1 $1,000 -$2,000

$2,000 -$1,000

Player A Strategy

-$1,000 $2,000

2 -$2,000 $1,000

a. Does Player A have a dominant strategy? Explain why or why not.

b. Does Player B have a dominant strategy? Explain why or why not.

Expert's answer

a. Player A has a dominant strategy, he will preffer the strategy 1 to minimize possible losses and maximize possible gains. In our case both Player A and Player B will chose strategy 1, so Player A will get $2000 and Player B will get $1000.

b. Player B has a dominant strategy too, he will preffer the strategy 1 to minimize possible losses. That's why, in our case both Player A and Player B will chose strategy 1, so Player A will get $2000 and Player B will get $1000.

b. Player B has a dominant strategy too, he will preffer the strategy 1 to minimize possible losses. That's why, in our case both Player A and Player B will chose strategy 1, so Player A will get $2000 and Player B will get $1000.

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