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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.
a) Define the term Nash equilibrium b) You are given the following pay-off matrix: Strategies for player 1 Strategies for player 2
Consider a game in which player 1 chooses rows, player 2 chooses columns and player 3 chooses matrices. Only Player 3''s payoffs are given below. Show that D is not a best response
An auction during which bidders simultaneously submit bids to the auctioneer while not information of the number bid by different participants. Usually, the very best bidder (or lo
What are the important forms of product differentiation? There are three significant forms of product differentiation, which are: 1. Differentiation through style or type –
Two people are involved in a dispute. Person 1 does not know whether person 2 is strong or weak; she assigns probability to person 2 being strong. Person 2 is fully informed. Each
Games with Strat e gic M ov es The ideas in this chapters can be brought to life and the students can better appreciate the subtleties of various strategic moves an
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GAME 2 The Tire Story Another game that we have successfully played in the first lecture is based on the “We can’t take the exam; we had a flat tire”. Even if the students hav
A simultaneous game is one during which all players build choices (or choose a strategy) while not information of the methods that are being chosen by different players. Although t
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
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