Question: The following payoff matrix defines a ‘hawk-dove' game. It is commonly used in biology to analyse the behaviour of two species that can be either aggressive or non-aggressive in food acquisition. In economics the same payoff structure can apply to a situation of aggressive or non-aggressive negotiation.
(a) Identify the pure strategy Nash equilibria in this game. (Hint: there are two.)
(b) Identify the mixed strategy Nash equilibria and the critical probabilities that define the stable equilibria.