2. Two car drivers approach an intersection. Each driver can either stop or continue, and payoffs are Stop Continue Stop 1,1 2,1 - ɛ Continue 1-ɛ, 2 0,0 The parameter &, with 0 < < 1, reflects the fact that each driver dislikes being the only one to stop. Find the symmetric Nash equilibrium (equilibria?) of this game. Now suppose drivers are reeducated to feel guilty about choosing Continue. Payoffs are changed as follows:

2. Two car drivers approach an intersection. Each driver can either stop or continue, and payoffs are Stop Continue Stop 1,1 2,1 - ɛ Continue 1-ɛ, 2 0,0 The parameter &, with 0 < < 1, reflects the fact that each driver dislikes being the only one to stop. Find the symmetric Nash equilibrium (equilibria?) of this game. Now suppose drivers are reeducated to feel guilty about choosing Continue. Payoffs are changed as follows:

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.1P

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