A game theorist is walking down the street in his neighborhood and finds $20. Just as he picks it up, two neighborhood kids, Mark and Nancy, run up to him, asking if they can have it. Because game theorists are generous in nature, he says he's willing to let them have the $20, but only according to the following procedure: Mark and Nancy are each to (independently) submit a written request as to their share of the $20. Let m denote the amount that Mark requests for himself and n be the amount that Nancy requests for herself. M and n are required to be chosen from the interval [0, 20]. If m+n =< 20, then the two receive what they requested, and the remainder (20 - m - n) is split equally between them. If, however, m+n> 20 the game theorist keeps the $20. Mark and Nancy are the players in this simultaneous-move game. Assume that each of them has a payoff equal to the amount of money that he or she receives.


Required:

Find all Nash equilibria for this game

Respuesta :

Mark and Nancy must submit a written request for their share of the $20, both of them must keep in mind that the solution is to split evenly, $10 each.

What is the main purpose of game theory?

Game Theory, which could very properly be called Interdependent Decision Theory, has as its object of analysis situations where the outcome of the action of individuals, groups of individuals, or institutions substantially depends on the actions of others involved.

With this information we can conclude that Mark and Nancy should submit a written request for their share of the $20, both of them should keep in mind that the solution is to split evenly, $10 each.

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