Unformatted text preview: defecting and co‐
operating increases co‐operation C. Cheap talk is not a credible commitment device. D. Self‐interest is consistent with maximising social welfare E. Abstain 27. In a public goods game with punishment, the game theoretic prediction is that: [Pen. 0] A. Contributions to the common pot should increase substantially since punishment is effective B. People will punish free‐riders even if punishment is costly to themselves C. There will be no impact on contributions to the common pot, since punishment is costly, and rational individuals will not use this option D. The threat of punishment is enough to increase contributions to the public pot E. Abstain 0B 13 28. Dora recently purchased a new car. The final price that Dora paid included a dealer discount, a R1000 manufacturers discount and a student discount of R400, plus a zero percent interest rate charge for a 36 month loan. All these options were advertised as part of the final price. This practice takes advantage of the psychology of [Pen. 0.5] A.
E. Sunk costs Hedonic...
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- Spring '11
- Microeconomics, representative, E. Abstain