Suppose Jordan and Lee Are Trying to Decide What to Do

question 70

Multiple Choice

Suppose Jordan and Lee are trying to decide what to do on a Friday.Jordan would prefer to see a comedy while Lee would prefer to see a documentary.One documentary and one comedy are showing at the local cinema.The benefit they receive from seeing the films either together or separately are shown in the payoff matrix.Both Jordan and Lee know the information contained in the payoff matrix.They purchase their tickets simultaneously,ignorant of the other's choice. $\begin{array}{c}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Jordan }\\\text {Lee}\begin{array}{|l|l|l|}\hline & {\text { Comedy }} & {\text { Documentary }} \\\hline \text { Comedy } & \begin{array}{l}\text { Lee: } 3 \\\text { Jordan: } 5\end{array} & \begin{array}{l}\text { Lee: } 1 \\\text { Jordan } 1\end{array} \\\hline \text { Documentory } & \text { Lee } 2 & \text { Lee: } 5 \\& \text { Jordan: } 2 & \text { Jordan 3 } \\\hline\end{array}\end{array}$
Refer to the figure above.This game has __________ Nash equilibrium(s) .

• A) 0
• B) 1
• C) 2
• D) 4

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Definitions:

Large Market

A market with a vast number of consumers and suppliers, often associated with significant sales potential and competitive dynamics.

Risk Premium

The extra return expected by an investor for holding a risky asset over a risk-free asset, serving as compensation for the higher risk.

Individual

Refers to a single, separate, unique member or entity, often used in the context of a single person or unit in a study or statistical analysis.