The Payoff Matrix Below Shows the Payoffs for Firm a and Firm

question 43

Multiple Choice

The payoff matrix below shows the payoffs for Firm A and Firm B,each of whom can either "cooperate" or "cheat." The numbers in parentheses are (payoff for A,payoff for B) . $\begin{array}{c}&\text { Firm B }\\\text { Firm A }&\begin{array}{l|cr} & \text { Coop erate } & \text { Cheat } \\\hline \text { Cooperate } & (30,30) & (10, x) \\\text { Cheat } & (x, 10) & (20,20) \end{array}\end{array}$
-Refer to Table 11- 2.Of the choices provided below,what is the minimum value for x in order for both firms' cheating to be a Nash equilibrium?

• A)25
• B)60
• C)70
• D)40
• E)80

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Definitions:

Sampling Distribution

The probability distribution of a statistic based on a large number of samples drawn from a specific population.

Sample Size

The number of individuals or observations included in a subset of a population for the purpose of statistical analysis.

Z-score

A statistical measure that describes a value's relationship to the mean of a group of values, expressed in terms of standard deviations from the mean.

Sampling Distribution

The sampling distribution is a probability distribution of a statistic obtained by selecting all possible samples of a specific size from a population.