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
Tower defense - is a subgenre of real-time strategy games. The goal of tower defense games is to try to stop enemies from crossing a map by building towers which shoot at them as t

When players interact by enjoying an identical stage game (such because the prisoner's dilemma) varied times, the sport is termed an iterated (or repeated) game. not like a game pl


Scenario Any game during which the identity of the player doesn't amendment the ensuing game facing that player is symmetric. In different words, every player earns identical pa

A type of trigger strategy sometimes applied to the repeated Prisoner's Dilemma during which a player responds in one amount with identical action her opponent utilized in the last

Games with Sequential Moves Most students find the idea of rollback very simple and natural, even without drawing or understanding trees. Of course, they start by being able to

Consider the Cournot duopoly model in which two rms, 1 and 2, simultaneously choose the quantities they will sell in the market, q 1 and q 2 . The price each receives for each uni

Two individuals, Player 1 and Player 2, are competing in an auction to obtain a valuable object. Each player bids in a sealed envelope, without knowing the bid of the other player.

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 subse

1. Two firms, producing an identical good, engage in price competition. The cost functions are c 1 (y 1 ) = 1:17y 1 and c 2 (y 2 ) = 1:19y 2 , correspondingly. The demand functi