Homework 5 - Sara Garrett University of Southern Indiana...

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Sara Garrett University of Southern Indiana Romain College of Business Department of Economics and Marketing Managerial Economics Econ601.001 Spring 2015 Timothy J. Schibik, Ph.D. Homework #5 – Chapters 15 – 16 Due: March 14, 2016 15-1 To Vote or Not to Vote Mr. and Mrs. Ward typically vote oppositely in elections and so their votes cancel each other out. They each gain two units of utility from a vote for their positions (and lose two units of utility from a vote against their positions). However, the bother of actually voting costs each one unit of utility. Diagram a game in which they choose whether to vote or not to vote. o Mrs. Ward Vote Don’t Vote Mr. Ward Vote -1, -1 1 , -2 Don’t Vote -2, 1 0, 0
15-2 To Vote or Not to Vote Part II Suppose Mr. and Mrs. Ward agreed not to vote in tomorrow s election. Would such an agreement improve utility? Would such an agreement be an equilibrium?
15-3 Shirk or Work Microsoft and a smaller rival often have to select from one of two competing technologies. The rival always prefers to select the same technology as Microsoft (because compatibility is important), while

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