The Nash equilibrium in a game of plain complements with simultaneous moves:
A)entails strategy values that "are too small".
B)entails strategy values that "are too large".
C)is Pareto- optimal.
D)results from a game of mutual negative externalities.

Question

Quizplus · Accepted Answer

In a game of plain complements, players' strategies are complementary, meaning each player's optimal strategy increases with the level of the other player's strategy. In Nash equilibrium, players choose strategies that are lower than the socially optimal level because they do not account for the positive externality their strategy has on the other player, leading to strategy values that "are too small".

The Nash Equilibrium in a Game of Plain Complements with Simultaneous