Megan and Amanda Are Both 7 Years Old and Operate

question 14

Essay

Megan and Amanda are both 7 years old and operate lemonade stands. Megan lives on the east side of Welch Avenue while Amanda resides on the west side of Welch Avenue. Each morning, the girls must decide whether to place their stand on Welch Avenue or Lincoln Avenue. When they set their stand-up, they don't know what the other will do and can't relocate. If both girls put their stand on Welch, both girls receive $175 in profits. If both girls put their stand on Lincoln, they each receive $75 in profits. If one girl sets their stand on Welch while the other operates on Lincoln, the stand on Welch earns $300 in profits while the stand on Lincoln earns $225. Diagram the relevant payoff matrix. Does either girl have a dominant strategy? Does the game have a Nash equilibrium? What is the maximin strategy of each player in the game?

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Definitions:

Oberlin College

A private liberal arts college in Oberlin, Ohio, notable for being the first college in the United States to regularly admit female and African American students.

Antislavery Activism

Efforts and movements dedicated to ending the practice of slavery and emancipating slaves.

The Liberator

A notable antislavery newspaper founded by William Lloyd Garrison in 1831, advocating for the immediate emancipation of all slaves.

Abolitionist Struggle

The movement aimed at ending the slave trade and emancipating slaves, primarily active in the 18th and 19th centuries in Western countries like the United States and Britain.