Assurance game, Game Theory

Assurance game Scenario

"Assurance game" may be a generic name for the sport a lot of commonly called "Stag Hunt." The French thinker, Jean Jacques Rousseau, presented the subsequent state of affairs. 2 hunters will either jointly hunt a stag (an adult deer and rather massive meal) or individually hunt a rabbit (tasty, however substantially less filling). searching stags is kind of difficult and needs mutual cooperation. If either hunts a stag alone, the prospect of success is minimal. searching stags is most useful for society however needs lots of trust among its members.

Description

There are 2 pure strategy equilibria. each players like one equilibrium to the opposite - it's each Pareto optimal and Hicks optimal. However, the inefficient equilibrium is a smaller amount risky because the payoff variance over the opposite player's methods is lower. Specifically, one equilibrium is payoff-dominant whereas the opposite is risk-dominant.

Example



Firm 2



invest

don't

Firm 1

invest

10,10

-50,0

don't

0,-50

0,0

General Form



Player 2



L

R

Player 1

U

a,w

b,x

D

c,y

d,z

Where the following relations hold:
a > c >= d > b 
w > x >= z > y

 

Posted Date: 7/21/2012 4:00:06 AM | Location : United States







Related Discussions:- Assurance game, Assignment Help, Ask Question on Assurance game, Get Answer, Expert's Help, Assurance game Discussions

Write discussion on Assurance game
Your posts are moderated
Related Questions
The best reply dynamic is usally termed the Cournot adjustment model or Cournot learning after Augustin Cournot who first proposed it in the context of a duopoly model. Each of two

1. The publishing industry in the country of Font, where the local currency is the stet, is dominated by two companies, the Arial Book Co. and Verdana Works Ltd.. Currently, both o

The interaction among rational, mutually aware players, where the choices of some players impacts the payoffs of others. A game is described by its players, every player's methods,

This chapter introduces mixed strategies and the methods used to solve for mixed strategy equilibria. Students are likely to accept the idea of randomization more readily if they t

What are the important forms of product differentiation? There are three significant forms of product differentiation, which are: 1. Differentiation through style or type –

A strategy consisting of potential moves and a chance distribution (collection of weights) that corresponds to how frequently every move is to be played. A player would solely use

A type of initial worth auction during which a "clock" initially indicates a worth for the item for sale substantially beyond any bidder is probably going to pay. Then, the clock g

Rules of Snake Eyes (small variation on game called Craps in USA) Player rolls two dice. On the first roll if the total of the dice is 2 (snake eyes): player wins and rece

The Prisoners’ Dilemma Game The idea that tacit cooperation can be sustained in an ongoing relationship is very simple and students easily accept it. The formal analysis

QUESTION ONE. (a) The probability that, a bomber hits a target on a bombing mission is 0.70 Three bombers are sent to bomb a particular target. (i)  What is the probabilit