Payoff Matrix in Economics: Theory & Examples


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question 1 of 3

Based on the following payoff matrix what is one of the possible strategies?

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1. Based on the following payoff matrix what is the payoff for Investor 2 if she chooses to sell and Investor 1 chooses to hold?

2. In the following payoff matrix what is the aggregate outcome if both investors decide to hold?

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About This Quiz & Worksheet

A payoff matrix is a tool used to assist in decision making. The following quiz will test you on definitions and your ability to interpret a payoff matrix to solve problems.

Quiz & Worksheet Goals

This quiz will require knowledge of:

  • Games of strategies
  • Purpose of a payoff matrix
  • How to read and analyze payoff matrixes

Skills Practiced

  • Critical thinking - apply relevant knowledge to view decision making in a different light
  • Problem solving - use acquired information to read a payoff matrix and determine an aggregate outcome
  • Interpreting information - verify that you can read information regarding the payoff matrix and interpret it correctly

Additional Learning

If you'd like to learn more about the payoff matrix, see the related lesson called Payoff Matrix in Economics: Theory & Examples. In this lesson you will learn about:

  • Games of strategy as related to the pay off matrix
  • How to read a payoff matrix
  • Aggregate Outcomes