Use the following case from question
Two street racers are playing a simultaneous game of chicken.They have to race towards each other and whoever swerves first is chicken and faces shame,a loss of 8,while the winner enjoys a gain of 3.If neither stop,they would crash into each other,a loss of 10.If both of them swerve at the same time,they are both chicken and face a loss of 5 each
-If player B destroys his own brakes before the race,and player A sees that ,what would the new Nash equilibrium be in this case?
A)Player A stops,Player B does not
B)Player B stops,Player A does not
C)Both players stop
D)Neither players stop

Question

​Use the following case from question
Two street racers are playing a simultaneous game of chicken.They have to race towards each other and whoever swerves first is chicken and faces shame,a loss of 8,while the winner enjoys a gain of 3.If neither stop,they would crash into each other,a loss of 10.If both of them swerve at the same time,they are both chicken and face a loss of 5 each
-​If player B destroys his own brakes before the race,and player A sees that ,what would the new Nash equilibrium be in this case?
A)​Player A stops,Player B does not
B)Player B stops,Player A does not
C)Both players stop
D)​Neither players stop

Quizplus · Accepted Answer

With Player B destroying his own brakes, he only has one option left, which is to not stop and race towards Player A. Player A is aware of this and knows that if he also races towards Player B, they will crash and both will face a loss of 10. Therefore, the best option for Player A is to stop, which results in a loss of 8, but avoids the larger loss of 10. Player B has no other option but to race towards Player A, so the new Nash equilibrium is for Player A to stop and Player B to not stop.

​Use the Following Case from Question

Use the Following Case from Question