Assurance game scenario, Game Theory

"Assurance game" is a general name for the game more commonly known as "Stag Hunt." The French philosopher, Jean Jacques Rousseau, presented the subsequent circumstances. Two hunters can moreover jointly hunt a stag (an adult deer and quite large meal) or individually hunt a rabbit (tasty, but significantly less filling). Hunting stags is quite difficult and need mutual cooperation. If either hunts a stag alone, the chance of victory is negligible. Hunting stags is most advantageous for society but needs a ample of trust amid its members.

Description

 

There are two pure policy equilibria. Both players favor one equilibrium to the other - it is both Pareto optimal and Hicks optimal. However, the incompetent equilibrium is less risky as the payoff variance over the other player's strategies is lower. Specifically, one equilibrium is payoff-dominant while the other 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

I,V

II,VI

D

III,VII

IV,VIII

Where the following relations hold:
I> III >= IV > II 
V > VI >= VIII> VII

 

Posted Date: 7/21/2012 5:23:01 AM | Location : United States







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

Write discussion on Assurance game scenario
Your posts are moderated
Related Questions

A bid that indicates totally different costs for various quantitites of the item offered for sale. A series of price-quantity mixtures is tendered to the auctioneer.

A sub game excellent Nash equilibrium is an equilibrium such that players' methods represent a Nash equilibrium in each sub game of the initial game. it should be found by backward

In any game, payoffs are numbers that represent the motivations of players. Payoffs might represent profit, quantity, "utility," or different continuous measures (cardinal payoffs)

An auction during which just one item is on the market for sale. Procedures embody English, Dutch, and sealed bid auctions. When multiple units are sold in one auction, the auction

GAME PLAYING IN CLASS There are several games that are appropriate for use on the first or second day of class. These games are simple but can be used to convey important poin

A method by that players assume that the methods of their opponents are randomly chosen from some unknown stationary distribution. In every amount, a player selects her best respon

Named when Vilfredo Pareto, Pareto potency (or Pareto optimality) may be alive of potency. An outcome of a game is Pareto economical if there's no different outcome that produces e

Any participant in a very game who (i)  contains a nontrivial set of methods (more than one) and (ii) Selects among the methods primarily based on payoffs. If a player is non

Nineteenth century French economist attributed with the introduction of the theory of profit maximizing producers. In his masterpiece, The Recherches, published in 1838, Cournot pr