Suppose that the two couples in Question 1.13 only like to eat at restaurants when they can
Question:
Suppose that the two couples in Question 1.13 only like to eat at restaurants when they can go together so that the payoff is negative and the same for each (payoff \(=-1)\) if they dine out alone. How does the equilibrium change?
Data From Question 1.13:-
Two couples love eating at restaurants, particularly when they can go together. However, one couple prefers organic food while the other would rather eat non-organic food. If they go together, the payoff is higher for the couple who favors the type of food more (payoff \(=4\) ), and less for the other couple (payoff \(=3\) ). If they dine out alone, the payoff is smaller and the same for each (payoff \(=2\) ). Show the payoff matrix for these two couples and determine the Nash equilibria. How do the payoffs from the Nash equilibria compare?
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