Phil and Cathy are roommates who are taking the same economics class. This morning Phil wakes up and is trying to decide whether to go to class or not. He knows that if Cathy is going to go to class he will hear her fixing herself breakfast. Cathy knows that Phil may or may not go to class depending on what she does. The timing of their decisions and their respective payoffs are as represented by the diagram below, where choosing the upper path means go to class and choosing the lower path means don’t go to class. Cathy makes her decision first and Phil waits to see what she has decided before making his decision. If the payoffs for each are as shown, what is the equilibrium of thisgame?

  • CreatedDecember 12, 2014
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