Problem Set 3a

# Problem Set 3a - votes sincerely. Example: Say R votes W, D...

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Problem Set 3a Econ 166a / CMPS 166a Fall 2010 Barry Sinervo and John Musacchio Due October 26, 2010 1) Consider the 2012 presidential election game we considered in class between the (R)epublicans, (D)emocrats, and, (T)ea Partiers. Make the following added assumption to the game. Assume that each party earns an additional 0.1 payoff when they vote sincerely for their first choice candidate, even if that candidate loses. Under this assumption, find any and all Nash Equilibria. Recall: -We assumed each party votes as a block. (Strong Assumption) -The electorate is divided as Republicans 44%, Democrats 46%, Tea Partiers 10%. -Orders of Preference -- R: Whitman, Palin, Obama -- D: Obama, Whitman, Palin -- T: Palin, Whitman, Obama - Each Party gets a payoff of 2 if their top choice wins. 1 if their 2nd choice wins, and 0 if their last choice wins. Added assumption for this homework: add 0.1 to above payoffs when the party
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Unformatted text preview: votes sincerely. Example: Say R votes W, D votes O, and T votes P. Then the payoffs are (0.1, 2.1, 0.1) because Obama wins and each party votes sincerely. Say the votes are (W,O,W) then the payoffs are (2.1, 1.1, 1) because Whitman wins and only the Tea Party votes insincerely. 2) Harrington Chapter 4, #5 3) Harrington Chapter 5, #8 4) Harrington Chapter 5, #9 5) WITH YOUR PROJECT GROUP: Using one of your own games, which is the most interesting, develop a SFG that leads to an interesting outcome. You might want to reconsider your payoffs in the SFG to actually come up with an interesting dilemma based on the NE. Use the algorithm that first does IDSDS, then find all NE, then choose among those NE with a) criteria of IDWDS and b) the criteria of pareto efficiency....
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## This note was uploaded on 03/03/2011 for the course ECON 414 taught by Professor Staff during the Spring '08 term at Maryland.

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