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Homework answers / question archive / Question: You and your friend are gambling and each of you have two balls: yellow and red

Question: You and your friend are gambling and each of you have two

balls: yellow and red. If the colour of the ball picked by you is the same as your friend's, you win. If the colour of the balls from you and your friend are different, your friend wins. Winning with a yellow ball earns a payoff of 100, while winning with a red ball earns a payoff of 80.

a) Write the 2x2 payoff table for the above game.

b) What is(are) the Nash equilibrium (equilibria), if any, under pure strategies in the above simultaneous game?

c) What is the Nash equilibrium under mixed strategy?