Question

After teaching a class on game theory, your instructor announces that if every student skips the last question on the next exam, everyone will receive full credit for that question. However, if one or more students answer the last question, all responses will be graded and anyone who skips the last question on the next exam will get a zero.
Assume that there is no chance for you and your classmates to discuss the situation before taking the exam. Will the entire class skip the last question? Choose one:

A. No, because the dominant strategy of the best-prepared students is to answer the last question.
B. No, because there is always at least one selfish person in the class who will answer the last question.
C. Yes, because everyone assumes that all other classmates will skip the question.
D. Yes, because this strategy offers the best result for everyone.

Answer 1

Answer:

The correct answer is letter "A": No, because the dominant strategy of the best-prepared students is to answer the last question.

Explanation:

In game theory, the dominant strategy reflects the best return for a player regardless of what the rest of the players choose to do. This approach opposes the Nash Equilibrium Solution. Named after American mathematician John Forbes Nash (1928-2015), the Nash equilibrium proposes all players should keep the same position to obtain the best return possible as long as none of them takes a different action.

In the scenario exposed, according to the dominant strategy students will analyze their return independently, thus, more prepared students are likely to answer the last question since they have better chances their answers will be correct.