Question:
1.Provide an intuitive description of a NASH equilibrium and compute the NASH equilibrium of the following game with simultaneous moves
2.The Principal-Agent Problem i. Provide an intuitive explanation of the Principle-Agent problem and discuss any mechanisms used to mitigate the problem. Initially, you should use the business owner-manager problem as an illustration. ii. Then, discuss the Principle-Agent problem (and the related concept of "moral hazard"), and any mechanisms used to mitigate the problem, in the context of the healthcare industry (the interaction of consumers, hospitals/doctors, and health insurance companies).
3 , 5 0 , 3
1 , 0 2 , 2
5 , 1
3 , 0
5 , 3 0 , 1 1 , 5
X Y Z
A
B
C
Player 2
Player 1