A newly married couple finds they are playing the following game.

Each can choose to invest in the relationship (doing things that make the other person happy) or not. If only one person invests in the relationship, that person is worse off (because of all the effort in making the other happy) and the other is better off. The payoff matrix is in utils, a measure of utility. If both invest, the joint payoff is highest.

a. Which choice makes the couple better off jointly?

b. If this is a noncooperative game (each person makes an irrevocable choice), what would the outcome be?

c. If this is a cooperative game, what would the outcome be?

d. Suppose divorce is possible. Does it make a difference if divorce requires mutual consent or if divorce is no-fault (where either party can get a divorce without the other’s consent)?

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Payoffs shown as: Husband's Payoff, Wife's Payoff Husband Not Invest Invest Wife Not Invest 100, 100 50, 250 Invest 250, 50 200, 200