Two foolish people drive toward each other in the middle of the road. As they approach the impact point, each has the op

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Two Foolish People Drive Toward Each Other In The Middle Of The Road As They Approach The Impact Point Each Has The Op 1 (166.55 KiB) Viewed 75 times

Two foolish people drive toward each other in the middle of the road. As they approach the impact point, each has the option of continuing to drive down the middle of the road or to swerve. Both believe that, if only one driver swerves, that driver loses face (payoff = 0) and the other gains in self-esteem (payoff = 8). If neither swerves, they are maimed or killed (payoff = - 4). If both swerve, no harm is done to either (payoff = 4). Shown to the right is the payoff matrix for these two drivers. Describe the possible Nash equilibria for this game. Driver 1 Continue Swerve 4 0 A. The Nash equilibrium is for both drivers to continue driving toward each other. Continue OB. This game has no Nash equilibria. O C. The Nash equilibrium is for driver 1 to continue driving and for driver 2 to - 4 8 Driver 2 swerve. 8 4 Swerve D. The two Nash equilibria are for driver 1 to continue driving and for driver 2 to swerve and for driver 1 to swerve and for driver 2 to continue driving. O E. The Nash equilibrium is for both drivers to swerve. 0 4