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Question: in class we discussed the nash equilibrium solution concept and...

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Eacercise 3 In class we discussed the Nash Equilibrium solution concept and how it is useful to eliminate non-rational behavior, but with the disadvantage of not necessarily leading to a unique solution. One possible refinement that can be considered is the following: If more than one Nash Equilibrium exist, but one of them makes every player better off than under the other Nash Equilibria, then surely that is the Nash Equilibrium that will be played. Consider playing the following simultaneous move game, where numbers are in monetary amounts A (9001,9001 ,9000) B (9000, 0 (900 a. Obtain the Nash Equilibria and apply the above refinement to determine which of them will be played. b. Would you play according to (a), or does this game point towards a potential weakness in the refinement Explain.

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