00:01
Suppose that the eu and the united states decide to protect the fishing grounds that in the north atlantic, that each country will only send out one fishing fleet.
00:17
And if something happens and the agreement breaks down, what would the non -cooperative nash solution be? in order to figure that, the nash solution means that we're going to do whatever's best for us.
00:34
So if we look at things from the eu's point of view, the eu looks at the u .s.
00:40
And they say, well, if the u .s.
00:42
Sends out one fleet, then the best thing for us to do is send out two fleets.
00:48
Because if we also send out one fleet, then our profit is 10 ,000.
00:52
But if they send one and we send two, then the $12 ,000 profit is our best outcome.
01:02
And then the eu would consider the possibility if the u .s.
01:06
Sends out two fleets, then they have a choice of a profit of $4 ,000 if they stick with one fleet or if they stick with two fleets, or if they also send out two fleets, they could make $7 ,500.
01:21
So that's what they would prefer.
01:24
So the eu then's best choices, regardless of what the u .s.
01:30
Does, is to send out two fleets.
01:33
Then we look at things from the u .s...