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Unformatted text preview: other, who will receive a sentence of four years. If neither confesses, they will both be convicted of a minor offense and spend one year in prison. Choosing a convenient payoff representation for the preferences, we hare the game in Figure 17.1. This is a game in which there are gains from cooperation—the best outcome for the players is that neither confesses—but each player has an incentive to be a "free rider". Whatever one player does, the other prefers Confess to Don't Confess , so that the game has a unique Noah equilibrium ( Confess , Confess ). • Example 16.3 ( Hawk-Dove ) Two animals are fighting over some prey. Each can behave like a dove or like a hawk. The best outcome for...
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This note was uploaded on 09/10/2011 for the course DEFR 090234589 taught by Professor Vinh during the Spring '10 term at Aarhus Universitet, Aarhus.
- Spring '10