Study for chapter 15.docx - 1 Individual Problems 15-1 Mr...

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1. Individual Problems 15-1 Mr. Ward and Mrs. Ward typically vote oppositely in elections, so their votes “cancel each other out.” They each gain 24 units of utility from a vote for their positions (and lose 24 units of utility from a vote against their positions). However, the bother of actually voting costs each 12 units of utility. The following matrix summarizes the strategies for both Mr. Ward and Mrs. Ward. Using the given information, fill in the payoffs for each cell in the matrix. For example, in the top left cell, fill in the payoffs for Mr. Ward and Mrs. Ward if they both vote. ( Hint : Be sure to enter a minus sign if the payoff is negative.) Mrs. Ward Vote Don't Vote Mr. Ward Vote Mr. Ward: -12 , Mrs. Ward - 12 Mr. Ward: 12 , Mrs. Ward Don't Vote Mr. Ward: -24 , Mrs. Ward 12 Mr. Ward: 0 , Mrs. Ward -24 0
Now suppose that Mr. Ward does not vote. Again, the possible payoffs are determined by the “strategy” that Mrs. Ward chooses. If she chooses to vote (bottom left-hand cell), she gains 24 units of utility, incurs the cost of voting of 12 units of utility, and does not suffer the loss of utility from a potential vote for the opposition. Thus, Mrs. Ward's payoff from this outcome is 24−12=1224−12=12. At the same time, Mr. Ward receives a payoff of –24 units of utility, since Mrs. Ward has voted for the opposition and Mr. Ward has not gained any utility from voting, nor incurred the cost of voting. Again, assume that Mr. Ward does not vote. If Mrs. Ward does not vote either (bottom right-hand cell), then neither spouse receives any utility from voting or incurs any cost of voting. Since neither has voted for the opposition party, no loss of utility is suffered either. Thus, the payoff for both spouses is 0.

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