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Unformatted text preview: Section 2: Nash Equilibrium, Focal Equilibrium and Cournot Daniel Egel September 14, 2008 1 Warm up Problem Last week we talked about how I could make the “Students Print/Daniel Doesn’t Print” the only solution to the ‘iterated deletion of strictly dominated strategies’ ( IDSDS ) by punishing students who don’t print, remember? Now let’s think about this in the real world. I am going to give you a newspaper article and then ask some questions below: Sex, Drug Use and Graft Cited in Interior Department 1 By CHARLIE SAVAGE Published: September 10, 2008 WASHINGTON - As Congress prepares to debate expansion of drilling in taxpayer-owned coastal waters, the Interior Department agency that collects oil and gas royalties has been caught up in a wide-ranging ethics scandal including allegations of financial self-dealing, accepting gifts from energy companies, cocaine use and sexual misconduct. In three reports delivered to Congress on Wednesday, the departments inspector general, Earl E. Devaney, found wrongdoing by a dozen current and former employees of the Minerals Management Service, which collects about $10 billion in royalties annually and is one of the governments largest sources of revenue other than taxes. “A culture of ethical failure” pervades the agency, Mr. Devaney wrote in a cover memo. The reports portray a dysfunctional organization that has been riddled with conflicts of interest, unprofessional behavior and a free-for-all atmosphere for much of the Bush administrations watch. ... The report says that eight officials in the royalty program accepted gifts from energy companies whose value exceeded limits set by ethics rules – including golf, ski and paintball outings; meals and drinks; and tickets to a Toby Keith concert, a Houston Texans football game and a Colorado Rockies baseball game. The investigation also concluded that several of the officials “frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and gas company representatives.” The investigation separately found that the programs manager mixed official and personal business. In sometimes lurid detail, the report also accuses him of having intimate relations with two subordinates, one of whom regularly sold him cocaine....
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