Rachel and Joey are two students who are dating. Before they left for class this morning, they decided to meet for
dinner in the evening. After their last class, they go home and get ready for their date. Unfortunately, although they both remember the time—7:00 p.m.—neither of them can remember where they agreed to meet: Clementine or Beyond. Also, there is no way for them to contact each other before 7:00 p.m.
Where should they go? Let's assume that Joey prefers Clementine to Beyond, but Rachel prefers Beyond to Clementine. Joey loves Rachel, however, so he would rather be with her at Beyond than by himself at Clementine. Rachel loves Joey, so she would rather be with him at Clementine than by herself at Beyond. The figure below is the payoff matrix, where the payoffs are measured in utils (happy points).
What is Joey's dominant strategy? (Go to Beyond) (Go to Clementine) (Joey does not have a dominant strategy)
What is Rachel's dominant strategy? (Go to Beyond) (Go to Clementine) (Rachel does not have a dominant strategy)
What is the Nash equilibrium? (Joey to Beyond, Rachel to Clementine) (Joey to Clementine, Rachel to Beyond) (Both go to Clementine) (Both go to Beyond) (There are two, both go to Clementine, both go to Beyond)