Alice and Betsy Are Playing a Game in Which Each

question 17

Multiple Choice

Alice and Betsy are playing a game in which each can play either of two strategies, leave or stay.If both play the strategy leave, then each gets a payoff of $100.If both play the strategy stay, then each gets a payoff of $800.If one plays stay and the other plays leave, then the one who plays stay gets a payoff of $C and the one who plays leave gets a payoff of $D.When is the outcome where both play leave a Nash equilibrium?

• A)When D > C and C > $100.
• B)Never, since $800 > $100.
• C)When $100 > C and D > $800 but not when $800 > D
• D)Whenever D < $800.
• E)Whenever $100 > C.

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Definitions:

Positive Feedback

A process in which the end products of an action cause more of that action to occur in a feedback loop, amplifying the original action.

Drive Theory

is a psychological concept suggesting that behavior is motivated by the desire to meet basic biological needs or drives, such as hunger, thirst, or sex.

Psychologically Oriented

Focused or directed towards understanding the mental processes and behavior from a psychological perspective.

Instinct Approaches

Theoretical perspectives that emphasize the innate, automatic, genetic, and biological factors driving behavior.