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Unformatted text preview: ʼ s cover story (AIDS, Budget); Magazines are differentiated products, meaning they have loyalties. January 20, 2011  Lecture 5 45 ° Nash Equilibrium NBR² (Newsweek ʼ s Best Response ²unction) TBR² (Time ʼ s Best Response ²unction) P T = 1/2 + (1/2 * P N ) P N = 1/2 + (1/2 * P T ) $ 1.00 $0.90 $1. 10 $1. 10 $ 1.00 $0.90 (+1, 1) (1, +1) (1, +1) (+1, 1) (5*, 5*) (0, 25) (25, 0) (1, 1) Pare to Superior (here we see that even though it ʼ s in their best interest to Confess, both Bonnie and Clyde could ʼ ve gotten a higher payoff if they could somehow agree to Withhold. Matching Pennies Jane Heads Tails Heads Here there is no Nash Equilibrium because there are John only two possible outcomes: (1, +1) or (+1, 1) Tails (this could be considered a zerosum game) Prisoners ʼ Dilemma Clyde Confess Withhold Confess Bonnie Withhold January 20, 2011  Lecture 5...
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 Spring '09
 Game Theory, Bonnie

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