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Questions › CUET-PG › CUET-PG 2024 › Q5
4 marks, −1Game Theory › Game theory and strategic behaviour › Pure-strategy Nash equilibriumModerateabout 1 min

CUET-PG 2024 Question 5: Game theory and strategic behaviour

Firm 1 and firm 2 face the payoff matrix below (profit in INR crores):

Firm 2: CooperateFirm 2: Compete
Firm 1: Cooperate5, 50, 10
Firm 1: Compete10, 02, 2

Firms can cooperate to share market profits or compete. If they cooperate they share INR 10 crores equally; if they compete the market output falls to INR 4 crores shared equally; if one competes while the other cooperates the former obtains INR 10 crores and the other zero. In equilibrium firm 1 and firm 2 should respectively

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Game theory and strategic behaviour has come up 61 times in 6 exams since 2008.

What this question tests

This question is on Pure-strategy Nash equilibrium, part of Game theory and strategic behaviour in Game Theory.

Outcomes from which no player wants to deviate, and classic games that illustrate them.

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Question from the CUET-PG 2024 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.