During the pandemic, stockpiling behaviours have been criticized in the newspapers and described as irrational. From a game theory perspective, stockpiling of toilet paper or food can be modelled as a prisoner's dilemma game. a. Explain the strategic interactions behind the stockpiling behaviour. Does individual rationality lead to a socially desirable outcome? Why? b. Assume that we have two players who can choose between option 1: stockpiling food or toilet paper; and option 2: waiting to buy. They believe that there is a risk that supermarket will run out of stock. The following matrix gives the payoffs of each choice, where in each cell, the first number is the payoff of player A and the second number is the payoff of player B. Find the equilibrium by elimination of dominated strategies. Player B Waiting Stockpilling 6,6 2,8 Player A Waiting Stockpilling 8,2 4,4

During the pandemic, stockpiling behaviours have been criticized in the newspapers and described as irrational. From a game theory perspective, stockpiling of toilet paper or food can be modelled as a prisoner's dilemma game. a. Explain the strategic interactions behind the stockpiling behaviour. Does individual rationality lead to a socially desirable outcome? Why? b. Assume that we have two players who can choose between option 1: stockpiling food or toilet paper; and option 2: waiting to buy. They believe that there is a risk that supermarket will run out of stock. The following matrix gives the payoffs of each choice, where in each cell, the first number is the payoff of player A and the second number is the payoff of player B. Find the equilibrium by elimination of dominated strategies. Player B Waiting Stockpilling 6,6 2,8 Player A Waiting Stockpilling 8,2 4,4

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Could you help me with part 2 please?
Type out the correct answer ASAP with proper explanation of it In the Ultimatum Game, player 1 is given some money (e.g. $10; this is public knowledge), and may give some or all of this to player 2. In turn, player 2 may accept player 1’s offer, in which case the game is over; or player 2 may reject player 1’s offer, in which case neither player gets any money, and the game is over. a. If you are player 2 and strictly rational, explain why you would accept any positive offer from player 1. b. In reality, many players reject offers from player 1 that are significantly below 50%. Why
Answer with proper explanation. Thanks
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Describe the Nash equilibrium/a and the mutually-preferred outcome. Finally, consider how people are sometimes able to resolve this social dilemma in the real world. Clearly explain how this method is successful in moving the players to a socially optimal outcome.
Confused on what answer is best for the last part a. compartmentalizing b. the ultimatum game c. the endowment effect d. framing
rituo? A. Identify the pure-strategy Nash equilibrium/a in the game below, and identify the Pareto efficient strategy combinations. (You may simply state these, you do not need to show how you derived your answer.) B. Identify the mixed-strategy equilibrium to the game. Show your work. You may use the equations from the "generic" 2X2 game if you wish. Doing it the long way is fine, however. C. State the payoff for each player in the mixed-strategy equilibrium. Is the mixed-strategy combination Pareto efficient? Player 1 U D 20 Player 2 L (10,15) (1,5) R (0,6) (1,6)
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