Question: Thing One and Thing Two are having a dinner party. Thing One is cooking, Thing Two is bringing the drinks. Thing One knows that

Thing One and Thing Two are having a dinner party. Thing One

Thing One and Thing Two are having a dinner party. Thing One is cooking, Thing Two is bringing the drinks. Thing One knows that Thing Two will bring sake, wine, or Soda. Thing Two knows that Thing Two is cooking Asian food, Pasta, or BBQ. The table below illustrates how the friends rank the possible meals. Higher numbers correspond to higher utility. It is common knowledge that the two friends are rational. Ramen 1. 2. 3. Pasta BBQ Sake 5; 5 3; 3 1; 2 Wine 3; 3 2; 2 1; 7 Soda 2; 1 3; 1 6; 6 Consider the possible meals. Which meal gives Thing One and Thing Two the highest combined utility? Now, suppose that Thing One cooks BBQ. What is Thing Two's best response? In the matrix, using circles illustrate Thing One's best responses. Then, using diamonds illustrate Thing Two's best responses. 4. Is there a Nash equilibrium in this game? Is there more than one? What is the most likely outcome of this interaction?

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