GER 1791 Lecture Notes - Lecture 5: Margaret Atwood
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10 Jan 2018
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Consider the following game where a robber is attempting to steal a diamond, and a police officer is on duty to guard the diamond. The officer is bored however and considers going to get a doughnut. The normal form of the game is represented below where the officer is the column player and the robber is the row player.
Guard | Doughnut | |
Steal | -5,5 | 10,-4 |
Not | 0,-1 | -1,2 |
A) Find any Nash equilibria of this game.
B) Suppose the officer notices the "hot doughnuts" sign is on, so the payoff of eating a doughnut when the robber does not steal increases from 2 to 4 (the rest of the payoffs are unchanged). How would this change the officer's decision, if at all? What is the new equilibrium?