Utilizing the file attached above, which contains the matrix below, devise a strategic game for a real-life situation between two players that leads to a prisoner’s dilemma because of positional externalities. Make sure that you label who the players are, devise and label the two strategies, and type-in the accompanying payoffs in the matrix that have been appropriately underlined to outline each player’s best responses. You need to then write an essay describing the real life situation and the details of your game and why the devised payoffs are appropriate. In addition, you need to detail each player’s best responses in the game, given what the opposing player is doing, and you need to describe how the strategies lead to a prisoner’s dilemma because of inherent positional externalities embedded within the game. The essay needs to be a minimum of one page (excluding the matrix). The example that you create doesn’t have to necessarily pertain to purely business or economic matters. You can create and come up with any situation that you choose.
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