Question: Need help with this question: Please find the nash equilibrium of this game and explain the steps to do so: Four players contemplate a heist.

Need help with this question:

Please find the nash equilibrium of this game and explain the steps to do so:

Four players contemplate a heist. It's risky for them to communicate, and each player has to decide independently whether to participate in the heist (strategy P) or not (strategy N). Due to the elaborate security system, players need to work in pairs to succeed: the heist is successful only if exactly two or all four players participate. If the heist is successful, each of the four players gets a benefit of 2 (even those who don't participate in the heist). Every player who participates in the heist bears a cost of 1 (regardless of whether the heist succeeds or fails). A player who doesn't participate in the heist has cost 0. Therefore, the payoff of a player who chooses P is 1 if the heist succeeds, and is -1 if the heist fails, while the payoff of a player who chooses N is 2 if the heist succeeds, and is 0 if the heist fails.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!