Nash Equilibria Normal Form

  • 2 opposite NE
    • both opera or both football
  • best as long as both choose the same, no incentive to deviate

Comparison with previous Games

  • chance is here not necessary to produce a positive output
    • both have a subgame strategy of going to the own venue (top right)
    • collusion can only happen when 1 - and only 1 - player is deviating from their subgame strategy to increase the payoffs

Analysis Problems and Long-Term Thinking

  • analysis
    • nothing interesting, perfect 50/50 split as if picked randomly
  • long-term marriage
    • one can think of colluding to always go to either venue together (both opera or both football) which will leave one of the players with a higher payoff
    • in reality there will be some arrangement of alternating the venue either each time or occasionally to create equal payoffs for both partners