I think a better aproach would be to treat the options as integers, it's easier to compare.
I would do something like this:
final static int ROCK = 1, SCISSOR = 2, PAPER = 3;
public static void main(String[] args)
{
Scanner scan = new Scanner(System.in);
System.out.println("Player 1: Choose (1) - Rock, (2) - Scissors, or (3) - Paper: ");
int player1 = scan.nextInt();
System.out.println("Player 2: Choose (1) - Rock, (2) - Scissors, or (3) - Paper: ");
int player2 = scan.nextInt();
if (player1 == player2)
{
System.out.print("It is a tie");
} else {
switch (player1){
case ROCK:
if (player2 == SCISSOR)
System.out.print("Player 1 wins!");
else
System.out.print("Player 2 wins!");
break;
case SCISSOR:
if (player2 == PAPER)
System.out.print("Player 1 wins!");
else
System.out.print("Player 2 wins!");
break;
case PAPER:
if (player2 == ROCK)
System.out.print("Player 1 wins!");
else
System.out.print("Player 2 wins!");
break;
}
}
}