You are in a class with one other student. It is the end of the semester and final exams are in one week. Your teacher has said the final exam will be graded so that anyone who scores the class average on the final exam will receive a B in the class. Anyone who scores above the class average will receive an A in the class. Anyone who scores below the class average will fail the class. You would certainly score higher on the exam than the other student. You and the other student have made an agreement not to take the final exam so that the class average is zero and you both receive a B grade.
a. Determine the basic elements in this game.
b. What are the strategies for each player.
c. What are the payoffs for each player.
d. Create a payoff matrix for this game.
e. What is your dominant strategy?
f. What is your classmate's dominant strategy?
g. Which choice will result in the best outcome? Why?