You are given the following game, representing the battle of Stalingrad. The payoffs
measure expected casualties on the opponent’s side, counted in 100,000s. Assume risk
neutrality on both sides (i.e. ui(x)=x).
Germany Full 2 1 2 3
Keep 1 3 3 2
a. Find all the game’s Nash equilibria.
b. The game represents a war with payoffs counted in hundreds of thousands of
casualties. We can assume that each side’s casualties are viewed negatively by itself
and positively by the rival. Is the game a mixed-motive game? If so, how is this
possible, given the previous statement? Explain. Refer to the payoff matrix in your
c. Do the players have an interest in coordinating their strategies in this game?
d. Find all the game’s Nash equilibria if players have the following risk function:
e. Are players in section d risk-loving or risk-neutral?