(See Problem 3

question 2

Multiple Choice

(See Problem 3.) Two players are engaged in a game of "chicken." There are two possible strategies, Swerve and Drive Straight. A player who chooses to Swerve is called "chicken" and gets a payoff of zero, regardless of what the other player does. A player who chooses to Drive Straight gets a payoff of 3 if the other player Swerves and a payoff of -12 if the other player also chooses to Drive Straight. This game has two pure strategy equilibria and

• A) a mixed strategy equilibrium in which each player swerves with probability 0.80 and drives straight with probability 0.20.
• B) a mixed strategy equilibrium in which one player swerves with probability 0.80 and the other swerves with probability 0.20.
• C) a mixed strategy in which each player swerves with probability 0.40 and drives straight with probability 0.60.
• D) two mixed strategies in which players alternate between swerving and driving straight.
• E) no mixed strategies.

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