Assignment Pay-off Matrix

Last Updated on 28. April 2023 by Martin Schuster

Suppose we have the following situation.

There are two car drivers. They have to decide whether to take a short or a long route to get to their destination. The short route is narrow so that only one car fits through. If both drivers decide to take the short route, they cause a traffic jam that costs time to resolve. The pay-off for each would, in this case, be 1. However, if only one driver takes the short route, he would receive a pay-off of 5. If a driver uses the long route, which is wider but takes more time, he will receive a pay-off of 3 (independently from what the other driver does).

Solution