ps8s Duopolies

Therearetwoplayersthecongressmen

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Unformatted text preview: wants
the
law,
and
each
knows
that
the
law
needs
 two
(and
only
two)
more
votes
to
pass.

That
is,
the
law
will
pass
only
if
both
of
them
 vote
for
it,
but
it
will
not
pass
if
either
votes
against
it.

Each
Congressman
knows
 that
if
he
votes
for
this
law,
many
people
will
praise
them,
but
he
will
likely
face
 strong
opposition
for
reelection.

Think
of
their
utility
in
two
parts:
they
get
one
 source
of
utility
from
doing
what
their
constituents
want,
and
another
from
doing
 what
their
party
leadership
wants.
 a. Construct
a
two‐by‐two
normal‐form
game
that
will
help
you
to
analyze
the
 decision
these
Congressmen
face.

There
are
two
players
(the
Congressmen)
 and
two
actions:
vote
for
or
against.

Each
Congressman
suffers
a
utility
of
‐ 10
if
he
votes
against
his
constituents’
wishes.

On
the
other
hand,
if
they
 both
vote
“no,”
then
they
will
get
to
make
joint
appearances
on
Wolf
News,
 which
gives
each
Congressman
a
utility
of
20.
 
 Congressman
Frank
 Vote
For
 Vote
Against
 Vo...
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