Question: Game Theory - End of Chapter Problem There are two ice cream vendors, Ben and Jerry, on a crowded strip of beach. There are five
Game Theory End of Chapter Problem
There are two ice cream vendors, Ben and Jerry, on a crowded strip of beach. There are five permissible locations for ice cream vendors to locate, cleverly named positions and Position is at the far north end of the beach, Position at the far south end, and Position in the middle, while Positions and are midway between their respective neighbors. Each location may accommodate more than one vendor. There are beachgoers scattered uniformly across the beach at each position who will buy from the closest vendor.
a Fill in the payoff matrix below, with payouts reflecting the number of customers each vendor attracts. Each vendor gets the customers in his location plus customers in each adjoining location. For example: If Ben is at Position and Jerry is at Position Ben will get beachgoers from locations and and Jerry will get of the beachgoers from Positions and
begintabularlllllll
hline multicolumnc & multicolumnc Jerry
cline & Position & Position & Position & Position & Position
hline multirow Ben & Position & & & & &
hline & Position & & & & &
cline & & & & &
hline & Position & & & & &
hline & & & & &
hline & & & & &
hline
endtabular
b The Nash equilibrium in this game where the ordering is Ben Jerry is
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