-M&M and Dove are both considering issuing themed holiday candy. The profits for each strategy, regular candy or holiday candy, are summarized in the payoff matrix above. The Nash Equilibrium in this game is that Dove produces ________ and M&M produces ________.
A) holiday candy; regular candy
B) regular candy; holiday candy
C) regular candy; regular candy
D) holiday candy; holiday candy

Question

-M&M and Dove are both considering issuing themed holiday candy. The profits for each strategy, regular candy or holiday candy, are summarized in the payoff matrix above. The Nash Equilibrium in this game is that Dove produces ________ and M&M produces ________.
A) holiday candy; regular candy 
B) regular candy; holiday candy 
C) regular candy; regular candy 
D) holiday candy; holiday candy

Quizplus · Accepted Answer

In a Nash Equilibrium, each player's strategy is optimal given the other player's strategy. If both Dove and M&M produce holiday candy, neither can increase their payoff by unilaterally changing their strategy, making it the Nash Equilibrium.

-M&M and Dove Are Both Considering Issuing Themed Holiday Candy