EXERCISE 75.1 (Electoral competition between candidates who care only about the winning position) Consider the variant of Hotelling's model in which the can- didates (like the citizens) care about the winner's position, and not at all about winning per se. There are two candidates. Each candidate has a favorite posi- tion; her dislike for other positions increases with their distance from her favorite position. Assume that the favorite position of one candidate is less than m and the favorite position of the other candidate is greater than m. Assume also that if the candidates tie when they take the positions x₁ and x2, then the outcome is the compromise policy (x₁+x2). Find the set of Nash equilibria of the strategic
EXERCISE 75.1 (Electoral competition between candidates who care only about the winning position) Consider the variant of Hotelling's model in which the can- didates (like the citizens) care about the winner's position, and not at all about winning per se. There are two candidates. Each candidate has a favorite posi- tion; her dislike for other positions increases with their distance from her favorite position. Assume that the favorite position of one candidate is less than m and the favorite position of the other candidate is greater than m. Assume also that if the candidates tie when they take the positions x₁ and x2, then the outcome is the compromise policy (x₁+x2). Find the set of Nash equilibria of the strategic
Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter22: Frontiers Of Microeconomics
Section: Chapter Questions
Problem 7PA
Related questions
Question
PLEASE CHECK THIS HOW TO SOLVE PLEASE TEACH EXPLAIN STEP BY STEP
![EXERCISE 75.1 (Electoral competition between candidates who care only about the
winning position) Consider the variant of Hotelling's model in which the can-
didates (like the citizens) care about the winner's position, and not at all about
winning per se. There are two candidates. Each candidate has a favorite posi-
tion; her dislike for other positions increases with their distance from her favorite
position. Assume that the favorite position of one candidate is less than m and
the favorite position of the other candidate is greater than m. Assume also that
if the candidates tie when they take the positions x₁ and x2, then the outcome is
the compromise policy (x1+x2). Find the set of Nash equilibria of the strategic
game that models this situation. (First consider pairs (x₁, x2) of positions for which
either x₁ < m and x₂ < m, or x₁ > m and x2 > m. Next consider pairs (x1, x2)
for which either x₁ <m < x2, or x2 < m < x₁, then those for which x₁ = m and
x2 m, or x₁ m and x2: = m. Finally consider the pair (m, m).)
The set of candidates in Hotelling's model is given. The next exercise asks
you to analyze a model in which the set of candidates is generated as part of an
equilibrium.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcc93dd3a-e660-4464-bc8c-e382a2c34aae%2F02b18cf2-4da3-4122-b2c4-e2f988ae82bd%2Fzag41y_processed.png&w=3840&q=75)
Transcribed Image Text:EXERCISE 75.1 (Electoral competition between candidates who care only about the
winning position) Consider the variant of Hotelling's model in which the can-
didates (like the citizens) care about the winner's position, and not at all about
winning per se. There are two candidates. Each candidate has a favorite posi-
tion; her dislike for other positions increases with their distance from her favorite
position. Assume that the favorite position of one candidate is less than m and
the favorite position of the other candidate is greater than m. Assume also that
if the candidates tie when they take the positions x₁ and x2, then the outcome is
the compromise policy (x1+x2). Find the set of Nash equilibria of the strategic
game that models this situation. (First consider pairs (x₁, x2) of positions for which
either x₁ < m and x₂ < m, or x₁ > m and x2 > m. Next consider pairs (x1, x2)
for which either x₁ <m < x2, or x2 < m < x₁, then those for which x₁ = m and
x2 m, or x₁ m and x2: = m. Finally consider the pair (m, m).)
The set of candidates in Hotelling's model is given. The next exercise asks
you to analyze a model in which the set of candidates is generated as part of an
equilibrium.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Principles of Economics, 7th Edition (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781285165875/9781285165875_smallCoverImage.gif)
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Principles of Microeconomics](https://www.bartleby.com/isbn_cover_images/9781305156050/9781305156050_smallCoverImage.gif)
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Principles of Economics 2e](https://www.bartleby.com/isbn_cover_images/9781947172364/9781947172364_smallCoverImage.jpg)
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
![Principles of Economics, 7th Edition (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781285165875/9781285165875_smallCoverImage.gif)
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Principles of Microeconomics](https://www.bartleby.com/isbn_cover_images/9781305156050/9781305156050_smallCoverImage.gif)
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Principles of Economics 2e](https://www.bartleby.com/isbn_cover_images/9781947172364/9781947172364_smallCoverImage.jpg)
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Principles of Microeconomics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305971493/9781305971493_smallCoverImage.gif)
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![ECON MICRO](https://www.bartleby.com/isbn_cover_images/9781337000536/9781337000536_smallCoverImage.gif)