ECO 463
Introduction
Provide brief explanations as well as your answers.
1. Suppose a law is passed that prohibits farmers from using certain chemical fertilizers
because they contaminate ground water. The value of the expected reduction in illness to
wat
ECO 463
Crime
Provide brief explanations as well as your answers.
1. Suppose that the number of speeders during a holiday weekend, n, is related to the expected ne, p f , by the expression n = 3000/(pf ). While there is no social cost to
imposing the ne,
Assessment Equilibria
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LTEX le: Assessment Daniel A. Graham, September 29, 2011
Seltens Horse, illustrated in Figure 1, is a well known extensive form (dynamic) game of incomplete information. At his information node, Player 3 does not know whether the h
Expected Utility Analysis
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LTEX le: expectedutility Daniel A. Graham, September 8, 2011
1 Preferences for Probabilities
We now turn to characterizing preferences for lotteries with the goal of identifying a utility
function to represent these preferences
ECO 463
DisputeResolution
Provide brief explanations as well as your answers.
1. A plainti and defendant estimate the same probability of plainti victory at trial, 1/2, but
disagree about the amount that a victorious plainti will recover. The plainti esti
Bayesian Games
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L TEX le: BayesGame Daniel A. Graham, March 31, 2009
This is an illustration of the essential aspects of the strategic form of a game of incomplete information. There are two players, each of whom has two possible types and two possible a
ECO 463
Microfoundations
Provide brief explanations as well as your answers.
1. Two people could benet by cooperating on a joint project. Each person can either cooperate at a cost of 25 dollars or nk at no cost. If both choose to cooperate then each will
ECO 463
Contracts
Provide brief explanations as well as your answers.
1. Consider a variant of Akerlofs 1970 lemons model in which the quality of a used car is
indexed by q. There are several potential risk-neutral sellers and many potential riskneutral b
The Cumulative Distribution and Stochastic Dominance
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LTEX le: StochasticDominance Daniel A. Graham, September 1, 2011
A decision problem under uncertainty is frequently cast as the problem of choosing among
a set of stochastic variables. Not much is los
ECO 463
Torts
Provide brief explanations as well as your answers.
1. Consider a unilateral care accident model in which the injurer can either take care at a cost
of $130 or no care. Further suppose that the probability of an accident is zero if care is
t
ECO 463
Property
Provide brief explanations as well as your answers.
1. Suppose that a lake is collectively owned by 7 shermen. If ti denotes the amount of time
that the ith sherman spends shing per day, then the total value of the sh caught by all
of the
Nash Rehash
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LTEX le: nashrehash Daniel A. Graham, August 30, 2007
This is a summary of the essential aspects of the strategic form of a game which is characterized by a set of players, a set of actions available to each player and preferences of each pl
Sequential Games
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LTEX le: sequentialgames Daniel A. Graham, June 18, 2007
This is a summary of the essential aspects of the extensive form of a game of complete information. This form is a particularly convenient way of modeling games in which players a