You and a good friend have just finished having a drink together at a local bar and

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You and a good friend have just finished having a drink together at a local bar and are both insisting on paying the bill. The two of you agree to each flip a coin to resolve this "dispute." You pay (win) if both coins show either heads or tails; your friend pays (wins) if one coin shows heads and the other shows tails. What is the payoff matrix for this game? Is there a pure-strategy Nash equilibrium? What is the mixed-strategy Nash equilibrium?

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Microeconomics

ISBN: 9781292215624

8th Global Edition

Authors: Jeffrey Perloff

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