Big Pig and Little Pig Have Two Possible Strategies, Press

question 3

Multiple Choice

Big Pig and Little Pig have two possible strategies, Press the Button, and Wait at the Trough.If both pigs choose Wait at the Trough, both get 2.If both pigs choose Press the Button, then Big Pig gets 5 and Little Pig gets 5.If Little Pig presses the button and Big Pig waits at the trough, then Big Pig gets 10 and Little Pig gets 0.Finally, if Big Pig presses the button and Little Pig waits at the trough, then Big Pig gets 6 and Little Pig gets 2.In Nash equilibrium,

• A)Little pig will get a payoff of zero.
• B)Little Pig will get a payoff of 5 and Big Pig will get a payoff of 5.
• C)both pigs will wait at the trough.
• D)Little Pig will get a payoff of 2 and Big Pig will get a payoff of 6.
• E)the pigs must be using mixed strategies.

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Definitions:

Competitive Market

A market in which there are many buyers and sellers of the same good or service, none of whom can influence the price at which the good or service is sold.

Taxi Rides

Services offered by vehicles, typically cars, for hire to transport individuals from one location to another, based on a fare.

Excise Tax

A tax imposed on specific goods, services, or activities, often with the intention to reduce their consumption or generate revenue.

Taxi Rides

Refers to the service of transportation for individuals or small groups in a vehicle, often regulated and metered by local governments.