Reference no: EM131385531
Consider the following (not so unrealistic) scenario for a conflict between Iraq and the United States in the Persian Gulf area.
Iraq moves first and decides whether or not to invade Kuwait.
If Iraq does not invade Kuwait, the game is over and Iraq receives a payoff of 0, while the United States receives a payoff of 1,000.
If Iraq invades Kuwait, the United States must decide whether or not to send troops to Saudi Arabia.
If the United States does not send troops to Saudi Arabia, then the game is over and the payoff is 1,000 for Iraq and 100 for the United States.
If the United States sends troops to Saudi Arabia, Iraq must decide whether or not to leave Kuwait.
If Iraq leaves Kuwait, the game is over and the payoff is −1,000 for Iraq (which is humiliated) and 500 for the United States.
If Iraq decides to stay in Kuwait, the United States must decide whether or not to attack Iraq.
If the United States does not attack Iraq, the game is over. The presence of U.S. troops in Saudi Arabia is viewed as a farce and the United States suffers a great loss of prestige, while Iraq claims to have conquered "the evil intruder." Iraq therefore receives a payoff of 1,000 and the United States receives a payoff of −700.
If the United States attacks Iraq and wins the resulting war, the game is over. However, because the United States wins with great casualties, the payoffs are U* = −500 for the United States and I* = −900 for Iraq.
Question: If I* = −500 and U* = −900, what is the subgame perfect equilibrium for the game?
|
A liquidity trap arises when
: If there is too much deflation: A liquidity trap arises when:
|
|
Suppose that firms choose prices simultaneously
: Differentiated Bertrand. Consider a Differentiated Bertrand model in which demand is given by q1 = 100 – p1 + p2 and q2 = 100 – p2 + p1 for firm 1 and firm 2 respectively and where both firms faced zero fixed costs and constant marginal cost = c. Sup..
|
|
Is profit equal to producer surplus here
: Demand is defined by P=250-2Qd. Suppose that marginal cost is MC=Q where Q is the quantity produced by the monopoly. Find the monopoly quantity. Find the monopoly price. Is profit equal to producer surplus here?
|
|
Goods is likely to have the highest income elasticity
: When Fred's income was $100 per week, 10 units of good X were demanded. Now his income is $150 per week and 12 units of good X are demanded. Using the percentage change formula, the income elasticity of demand for good X equals ________. Which of the..
|
|
What is the subgame perfect equilibrium for the game
: Consider the following (not so unrealistic) scenario for a conflict between Iraq and the United States in the Persian Gulf area. Iraq moves first and decides whether or not to invade Kuwait. what is the subgame perfect equilibrium for the game?
|
|
Opportunity to organize the perfect health care system
: Suppose you had the opportunity to organize the perfect health care system. Explain how you would organize the financing method, reimbursement scheme, mode of production, and physician referral procedure. What are the basic differences between conven..
|
|
Government conducts balanced-budget increase
: The graph above shows the AD/LRAS/SRAS functions for a country. In the short run wages and prices are sticky due to contracts, but they fully adjust to market conditions in the long run. The government conducts a balanced-budget increase in its purch..
|
|
Which arguments do you find more persuasive
: The year 2014 closed with the unemployment rate just below 6 percent, real GDP growing at roughly 2.5 percent, inflation below 2 percent, and the federal budget showing a deficit under 3 percent of GDP. Which arguments do you find more persuasive?
|
|
Briefly define contract-warrant theory of product liabilty
: Briefly define the contract-warrant theory of product liability. What are the two obstacles facing the contract-warrant theory of product liability, according to Page Keeton?
|