15 Game Theory

# Pareto outcome nashequilibriumistheresultwhenboth

This preview shows page 1. Sign up to view the full content.

This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ose Player 1 is locked into Confessing, Player 2 is better off Confessing. ► So we put a star above Player 2’s Payoff. Player 2 C DNC C ­6 , ­6 0 , ­9 Player 1 DNC ­9 , 0 ­1 , ­1 13 Another Way to Solve a Game ►Suppose Player 1 is locked into Not Confessing, Player 2 is better off Confessing. ►So we put a star above Player 2’s Payoff. Player 2 C DNC C ­6 , ­6 0 , ­9 Player 1 DNC ­9 , 0 ­1 , ­1 14 Another Way to Solve a Game ►Suppose Player 2 is locked into Confessing, Player 1 is better off Confessing. ►So we put a star above Player 1’s Payoff. Player 2 C DNC C ­6 , ­6 0 , ­9 Player 1 DNC ­9 , 0 ­1 , ­1 15 Another Way to Solve a Game ► Suppose Player 2 is locked into Not Confessing, Player 1 is better off Confessing. ► So we put a star above Player 1’s Payoff. ► (Confess, Confess) is a Nash Equilibrium because it has two stars Player 2 C DNC C ­6 , ­6 0 , ­9 Player 1 DNC ­9 , 0 ­1 , ­1 16 Nash Equilibrium vs. Pareto Outcome ► Nash Equilibrium is the result when both players act strategically given what the other is going to do (Confess, Confess). ► Pareto Optimum is the result that benefits both players the m...
View Full Document

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern