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← 14-08 Game Console Question 1

Unit 14 08 Game Console Question 1.mp4

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Showing Revision 1 created 11/28/2012 by Amara Bot.

  1. Let's try another example.
  2. This one is called the Game Console Game,
  3. and the story is that there is a
  4. game console manufacturer called Acme,
  5. and it has to decide whether its next console
  6. is going to play Blu-ray discs or DVD discs.
  7. And then there's a game manufacturer called Best,
  8. and they similarly have to decide whether to put out their next game
  9. on Blu-ray discs or DVD discs.
  10. And the payoffs are if they're both on Blu-ray,
  11. A gets a +9, and B is also a +9.
  12. If they both choose to go with DVD, it's not quite as lucrative.
  13. A gets a +5. B gets a +5.
  14. And if they disagree, then they'll be in trouble, and they'll take losses.
  15. A gets a -4, and B gets a -1,
  16. while here A = -3 and B = -1.
  17. The first question is is there a dominant strategy?
  18. And is there one for A?
  19. Click here if yes.
  20. And is there one for B?
  21. Click here if yes, and if there's none at all, click here.
  22. There may be both A and B. It's your choice.
  23. And then the next question is is there an equilibrium?
  24. Click on any of these 4 outcomes
  25. to indicate whether there's an equilibrium.