Suppose Jordan and Lee are trying to decide what to do on a Friday. Jordan would prefer to see a comedy while Lee would prefer to see a documentary. One documentary and one comedy are showing at the local cinema. The payoffs they receive from seeing the films either together or separately are shown in the payoff matrix below. Both Jordan and Lee know the information contained in the payoff matrix. They purchase their tickets simultaneously, ignorant of the other's choice.
Which of the following statements is true?
A)The lower-left cell is the only Nash equilibrium.
B)Both the lower-left and upper right cells are Nash equilibria.
C)Both the upper-left and lower-right cells are Nash equilibria.
D)The upper-right cell is the only Nash equilibrium.

Question

Suppose Jordan and Lee are trying to decide what to do on a Friday. Jordan would prefer to see a comedy while Lee would prefer to see a documentary. One documentary and one comedy are showing at the local cinema. The payoffs they receive from seeing the films either together or separately are shown in the payoff matrix below. Both Jordan and Lee know the information contained in the payoff matrix. They purchase their tickets simultaneously, ignorant of the other's choice.   
 Which of the following statements is true?
A)The lower-left cell is the only Nash equilibrium. 
B)Both the lower-left and upper right cells are Nash equilibria. 
C)Both the upper-left and lower-right cells are Nash equilibria. 
D)The upper-right cell is the only Nash equilibrium.

Quizplus · Accepted Answer

Both players choosing the comedy is one Nash equilibrium, and both players choosing the documentary is another Nash equilibrium.

Suppose Jordan and Lee Are Trying to Decide What to Do