Q 13 Prisoners Dilemna

Question 1

Assumptions

Answer 1

-The information is common knowledge ie it is known to all players -each player is rational-ie he always tries to maximise his payoffs so the objective of the game is to minimize jail period. -The above game theory is considered as a one shot game where they get only one chance to answer.

Question 2

What is the best response?

Answer 2

Best response A is * Best response B is + If prisoner A confesses, prisoner B should confess for 2 years

Question 3

If prisoner A does not confess, what is the best strategy for B

Answer 3

confess so they get 0.2 years while prisoner A gets 5 years

Question 4

Nash equilibrium is defined as:

Answer 4

a concept of game theory where the optimal outcome of a game is one where no player has an incentive to deviate from his or her chosen strategy after considering an oponents choice. Overall an individual can receive no incremental benefit from changing actions, assuming other players remain constant in their strategies. A game may have multiple Nash equilibriums or none at all

Question 5

what would be the nash equilibrium for this question?

Answer 5

Best response of A is represented by *

Best response of B is represented by +

The dominant strategy for each player is to confess. Thus the Nash equilibrium is confess.

(A, B) = > (C,C)=>(2,2)

We find that the nash equilibrium is not the best stratedgy. The best is where both remain silent for (1, 1) year.