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Consider the electoral competition game presented in Lecture 6. In this game there are two candidates who simultaneously choose policies from the real line. There is a distribution of voters with median m and the candidate whose policy is closest to the median wins the election and the winning candidate's policy is implemented. If the two candidates are an equal distance from the median, then the average of the two policies is implemented. For this problem we suppose that both candidates care about both the implemented policy and winning the election. That is, the payo to each candidate has two parts. The first part is the utility from the implemented policy a*. That is, each candidate has utility u(a* ; xi), where xi is the ideal policy of candidate i and utility decreases to the left and right of xi. We suppose that xi < m < xj . The second part is the value of winning office, which we denote wi > 0 for candidate i. Putting these two parts together, we de ne the payoff to candidate i by
Find all Nash equilibria to this game.
An equilibrium refinement provides how of choosing one or many equilibria from among several in a very game. several games might contain many Nash equilibria, and therefore supply
What is the Iterated Dominant Strategy Equilibrium (IDSE) and associated pay-offs? Type your answer in the following form: (c,B) , (6, 4) if you think the outcome is
A strategy is strictly dominant if, no matter what the other players do, the strategy earns a player a strictly higher payoff than the other. Hence, a method is strictly dominant i
Not technically an auction, however a posted-price procedure during which the auctioneer sets a worth and sells to the primary bidder willing to pay it. The auction ends as soon as
A multiunit auction that during which within which each winning bidder pays a unique worth which depends on the particular bid placed by every winning participant. Alternatively,
Cardinal payoffs are numbers representing the outcomes of a game where the numbers represent some continuum of values, such as money, market share or quantity. Cardinal payoffs per
Explain the financial system terms definitions. The Financial System Definitions: Wealth It is sum of Current Savings and Accumulated Savings Financial asset P
Nineteenth century French economist attributed with the introduction of the theory of profit maximizing producers. In his masterpiece, The Recherches, published in 1838, Cournot pr
QUESTION ONE. (a) The probability that, a bomber hits a target on a bombing mission is 0.70 Three bombers are sent to bomb a particular target. (i) What is the probabilit
A type of auction in which the highest bidder is rewarded the object, but all bidders pay the auctioneer their bids. This differs from traditional first price auctions in which onl
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