Question: Consider the simultaneous, one - shot game described below. It represents a scenario referred to as playing chicken in which the two players are driving
Consider the simultaneous, oneshot game described below. It represents a scenario referred
to as "playing chicken" in which the two players are driving their vehicles directly at the other
person and choosing between chicken C and don't play chicken D Playing chicken means
the player swerves out of the way of the other player, don't play chicken means they continue
driving straight. The payoffs are utility levels and information is perfect. Use it to answer
the proceeding questions.
a Determine if there are any dominant andor mixed strategies for each player.
b What isare the Nash EquilibriumEquilibria of this game? Explain.
c Is there a potential collusive agreement? Explain and state whether this outcome is
likely given the scenario described.
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