A game that everyone knows is coin flipping. Suppose that Player 1 flips the coin (and is so skilled that he is able to flip it whichever way he wants) and Player 2 calls heads or tails. The winner gets $10 from the loser.
Player 2 (Call)
Heads
Tails
Player 1 (Flip)
Heads
-$10, $10
$10, -$10
Tails
$10, -$10
-$10, $10
a. Does either player have a dominant strategy? (2 points)
b. Is there a Nash equilibrium in this game? Explain. (2 points)
c. Games like this are called zero-sum games. Can you explain why? (3 points)