Practice Problem 1 Answers

Practice Problem 1 Answers - Selma Games Answers A. B. The...

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Selma Games Answers A. B. The model predicts that the marchers go forward and the police block. Both sides maximize their minimum payoff by doing so. (Note also that going forward is a dominant strategy for the marchers, and blocking is a dominant strategy for the police.) C. Yes. Neither side would want to move unilaterally from this outcome. D. Police Step Back Block Marchers Stop 3,3 2,4 Forward 4,2 1,1 E. Commitment (as in playing chicken). If the police committed credibly to blocking, then the marchers' rational choice in this model would be to stop (2) rather than go forward (1).
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Solutions to The Road to Oz A i. There is no equilibrium to this game. Recall that an equilibrium requires that no player wishes he/she had made a different choice. In this case, in every possible outcome, either Dorothy or Toto wishes they had made a different choice. Specifically Oz, Oz -- Toto wishes he had gone to Munchkinland (4 vs. 1) Oz, Munchkinland -- Dorothy wishes she had gone to Munchkinland (3 vs. 2) Munchkinland, Oz -- Dorothy wishes she had gone to Oz (4 vs. 1) Munch, Munch -- Toto wishes he had gone to Oz (3 vs. 2) ii. Toto and Dorothy have opposing interests. Dorothy is always better off if she finds Toto; Toto is always better off if he is not found. This is a "competitive" or "zero-sum" game. Three of the outcomes are Pareto efficient, because of this divergence of interests. (There is one inefficient solution, where each is in their least-preferred place, but it does not indicate mutual interests.) B i. Extensive form games use the "tree" form. The dashed line around Toto's choices indicate that he doesn't know which node he is at; that is, it is a simultaneous game. Because Dorothy would rather be in Oz, other things equal, she receives a payoff of 2 if she goes to Oz alone, and 4 if Toto goes to Oz too. She receives 3 if they meet up in Munchkinland. Her worst outcome is to be in Munchkinland alone. Toto has the same desire to meet Dorothy, but other things being equal, prefers to be in Munchkinland. So the payoffs are reversed.
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ii. The "maximin" strategy is to secure the best "worst" outcome. In the above game, each can avoid the worst payoff of 1 by going to their preferred location: Dorothy to Oz and Toto to Munchkinland. Unfortunately for Dorothy and Toto, if each use the maximin strategy, they will not find each other, and the result is a (2,2) outcome. Each will wish they went to the other place, so it is not an equilibrium outcome. The two equilibria are (Oz, Oz) and (Munch, Munch). iii. The message should say: "I'm going to Munchkinland." Toto has an opportunity to make a non-negotiable statement as to where to meet. Dorothy can not respond, and knowing that Toto has claimed Munchkinland as the meeting place, her best response is to go to Munchkinland. She receives a payoff of 3, and Toto 4. By committing to a location, Toto effectively secures a "first-mover" advantage, and receives his best possible outcome.
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Answers to Land Deals A. The zone of possible agreement (ZOPA) for this 2 party, 1 issue negotiation is the
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This homework help was uploaded on 04/22/2008 for the course PUB POL 55 taught by Professor Vigdor during the Spring '08 term at Duke.

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Practice Problem 1 Answers - Selma Games Answers A. B. The...

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