SERVER
Forehand Backhand
Forehand 90,1 0,10
RECEIVER
Backhand 0,10 6,4
The idea in this game is to see what happens to Game 1 when one payoff- (9,1)-- is drastically changed-- to (90,1). It's not tennis anymore, but let's see what happens.
2_1 What is the Nash equilibrium probability of Forehand for the Server?
A. Zero.
B. More than 0 but less than or equal to .2
C. Greater than .2 but less than .5.
D. Between .5 and .7, inclusive
E. Greater than .7
B. CORRECT. The Server must choose an extremely low probability of Forehand, though not a probability of zero, or the Receiver will take advantage of him. The equilibrium probability is .0625.
To get the correct answer, you need to choose a mixing probability X for the Server such that the Receiver does no better from Forehand than from Backhand. To do that, you solve
Receiver's Payoff (Forehand) =X (90) + (1-X)(0) = Receiver's Payoff (Backhand) =X(0) + (1-X) (6).
This solves to 90X = 6 - 6X, or 96X = 6, so X = .0625.
Return to Self Test 2.