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# problemset7 - Problem Set 7 Ben Polak Econ 159a/MGT522a...

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Problem Set 7. Ben Polak Econ 159a/MGT522a Three questions due Nov 7, 2005 (plus one optional question). 1. \Not Survivor" . [ This question was on the 2001 °nal exam .] Six former 159a students Ann, Bob, Carl, Dora, Ed, and Fran are the contestants in a new \real TV" show. They are placed on an island. The rules of the game are as follows. Ann goes °rst. She is given a bag that everyone knows contains six gold coins. Ann makes a proposal of how to allocate the six coins among the six contestants including herself. The contestants (including Ann) then vote ‘yes’ or ‘no’ on the proposal. If the proposal gets more than half the votes then the coins are allocated according to the proposal and everyone leaves the island. If the proposal gets half or fewer than half the votes then Ann has to leave the island empty-handed and she is out of the game. In this case, the bag of six gold coins passes to Bob. He gets to make a proposal of how to allocate the coins among the remaining contestants (i.e., including Bob but excluding Ann) and the remaining contestants (i.e., including Bob but excluding Ann) then vote. As before, if the proposal gets more than half the votes then the coins are allocated according to the proposal and everyone leaves the island. If the proposal gets half or fewer than half the votes then Bob has to leave the island empty-handed and is out of the game. In this case, the bag of six gold coins passes to Carl. And so on, with the same voting rules, with each failed proposal leading to expulsion of the proposer, and with the role of proposer being passed on alphabetically.

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problemset7 - Problem Set 7 Ben Polak Econ 159a/MGT522a...

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