Table 17-21 The Chicken Game Is Named for a Contest in Which

question 501

Multiple Choice

Table 17-21
The Chicken Game is named for a contest in which drivers test their courage by driving straight at each other. John and Paul have a common interest to avoid crashing into each other, but they also have a personal, competing interest to not turn first to demonstrate their courage to those observing the contest. The payoff table for this situation is provided below. The payoffs are shown as (John, Paul) .
-Refer to Table 17-21. What is (are) the Nash equilibrium (equilibria) in this Chicken game?

• A)John: Turn Paul: Turn
• B)John: Turn Paul: Drive Straight
• C)John: Drive Straight Paul: Turn
• D)Both b and c are Nash equilibria

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Definitions:

Non-compensatory Rule

A decision rule in which an option is rejected if it fails to meet at least one important criterion, regardless of its merits on other criteria.

Clever Hans Effect

The phenomenon where a creature (notably a horse named Clever Hans) appears to be able to perform tasks requiring intelligence, but is actually responding to cues from humans.

Negative Correlation

An association between two elements in which the rise of one leads to the fall of the other.

Causation

The action of causing something, implying a relationship where one event is the result of the occurrence of another event.