In a 3-player game, S subscript 1 equals S subscript 2 equals S subscript 3 equals left square bracket 0 comma 5 right square bracket. Each player obtains a payoff of 1 if her strategy equals the absolute value of the difference of the strategies of the other two players, and a payoff of 0 otherwise. Choose all of the following strategy profiles which are Nash equilibria. (0,0,0) (4,4,4) (2,2,4) (2,1,3) (2,2,0) (0,2,4)
Question
In a 3-player game, S subscript 1 equals S subscript 2 equals S subscript 3 equals left square bracket 0 comma 5 right square bracket. Each player obtains a payoff of 1 if her strategy equals the absolute value of the difference of the strategies of the other two players, and a payoff of 0 otherwise.
Choose all of the following strategy profiles which are Nash equilibria.
(0,0,0)
(4,4,4)
(2,2,4)
(2,1,3)
(2,2,0)
(0,2,4)
Solution
In this game, a Nash equilibrium is a strategy profile where no player can unilaterally change her strategy to improve her payoff, given the strategies of the other players.
Let's analyze each strategy profile:
(0,0,0): Each player's strategy is 0. The absolute difference between any two players' strategies is also 0. Therefore, each player obtains a payoff of 1. No player can improve her payoff by unilaterally changing her strategy, so this is a Nash equilibrium.
(4,4,4): Each player's strategy is 4. The absolute difference between any two players' strategies is also 0. Therefore, each player obtains a payoff of 1. No player can improve her payoff by unilaterally changing her strategy, so this is a Nash equilibrium.
(2,2,4): The absolute difference between the strategies of the first two players is 0, and the absolute difference between the strategies of the last two players is 2. Therefore, the first two players obtain a payoff of 1, and the last player obtains a payoff of 0. The last player can improve her payoff by changing her strategy to 2, so this is not a Nash equilibrium.
(2,1,3): The absolute difference between the strategies of the first and second players is 1, the absolute difference between the strategies of the first and third players is 1, and the absolute difference between the strategies of the second and third players is 2. Therefore, each player obtains a payoff of 0. Each player can improve her payoff by changing her strategy to the absolute difference of the strategies of the other two players, so this is not a Nash equilibrium.
(2,2,0): The absolute difference between the strategies of the first two players is 0, and the absolute difference between the strategies of the last two players is 2. Therefore, the first two players obtain a payoff of 1, and the last player obtains a payoff of 0. The last player can improve her payoff by changing her strategy to 2, so this is not a Nash equilibrium.
(0,2,4): The absolute difference between the strategies of the first and second players is 2, the absolute difference between the strategies of the first and third players is 4, and the absolute difference between the strategies of the second and third players is 2. Therefore, each player obtains a payoff of 0. Each player can improve her payoff by changing her strategy to the absolute difference of the strategies of the other two players, so this is not a Nash equilibrium.
In conclusion, the strategy profiles that are Nash equilibria are (0,0,0) and (4,4,4).
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