Find the backward induction equilibrium, Applied Statistics

A rightist incumbent (player I) and a leftist challenger (player C) run for senate. Each candidate chooses among two possible political platforms: Left or Right. The rules of the game are the following:

- If both choose the same platform, the incumbent wins the election and if they choose di erent platforms the challenger wins the election.

- The payo for winning the election is 2 and the payo of losing is 0 for each candidate.

- Moreover, candidates do not like to compromise their views. Therefore, independently of whether they win or not, they get an extra payo of 1 (that is, on top of the 0 or 2 mentioned above) if they propose the platform they like best.

(a) Draw the tree if:

(a-1) The Incumbent moves rst

(a-2) The Challenger moves rst

(a-3) The Incumbent and the Challenger move simultaneously

(b) Find the Backward induction equilibrium in cases (a-1) and (a-2) and the (pure and/or mixed strategy) Nash equilibria in case (a-3). Find the payo s of each candidate in each case.

(c) Interpret the results (important).

Posted Date: 3/14/2013 3:38:43 AM | Location : United States







Related Discussions:- Find the backward induction equilibrium, Assignment Help, Ask Question on Find the backward induction equilibrium, Get Answer, Expert's Help, Find the backward induction equilibrium Discussions

Write discussion on Find the backward induction equilibrium
Your posts are moderated
Related Questions

The Maju Supermarket stocks Munchies Cereal. Demand for Munchies is 4,000 boxes per year and the super market is open throughout the year. Each box costs $4 and it costs the store

slope parameter of 1.4 and scale parameter of 550.calculate Reliability, MTTF, Variance, Design life for R of 95%

Question: (a) (i) Define the term multicollinearity. (ii) Explain why it is important to guard against multicollinearity. (b) (i) Sometimes we encounter missing values

A file on DocDepot in the assignments folder on doc-depot called bmi.mtp contains data on the Body Mass Index (BMI) of a population of Ottawa residents. The first column identifies

Problem 1 Do male and female students differ significantly in regard to their average math achievement scores, grades in high school, and visualization test scores? Can you con

Why are graphs and tables useful when examining data? A researcher is comparing two middle school 7th grade classes. One class at one school has participated in an arts program

mark number of student 0-10 4 10-20 8 20-30 11 30-40 15 40-50 12 50-60 6 calculate frequency distribution

The Null Hypothesis - H0:  The random errors will be normally distributed The Alternative Hypothesis - H1:  The random errors are not normally distributed Reject H0: when P-v

Application of the chi Square Test