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

question 56

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.If x = 40,what is the Nash equilibrium in this game?

• A)(Firm A: cheat,Firm B: cheat)
• B)(Firm A: cooperate,Firm B: cooperate)
• C)(Firm A: cooperate,Firm B: cheat)
• D)(Firm A: cheat,Firm B: cooperate)
• E)there is no Nash equilibrium for this value of x

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Definitions:

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