Find nash equilibrium if both bid split evenly


A selfless person approaces Jones & smith with a $100 bill and offer to sell it to the highest bidder, but both the winning and losing bidders must pay her their bids. So if Jones bids $2 and Smith bids $1 they pay a total of $3, but jones gets the money, leaving him with a net gain of $98 and smith with -$1. If both bid the same amount, the $100 is split evenly between them. Assume that each of them has only two $1 bills on hand, leaving three possiblebids, $0, $1 or $2. Write out the payoff matrix for this game , and then find its Nash equilibrium.

Request for Solution File

Ask an Expert for Answer!!
Microeconomics: Find nash equilibrium if both bid split evenly
Reference No:- TGS064117

Expected delivery within 24 Hours