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Game 1 US Propose Compromise Punish with Sanctions Iran Iran Back Ассept compromise Accelerate Retaliate down nuclear effort US 1 .6 Back Air .3 1-X down strike -.2 1 .4

Game 1 US Propose Compromise Punish with Sanctions Iran Iran Back Ассept compromise Accelerate Retaliate down nuclear effort US 1 .6 Back Air .3 1-X down strike -.2 1 .4

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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QUESTIONS:

1. In Game 2, is the US “weak” or “strong”? Why ?

2.In Game 2, what kind of compromise would Iran accept as preferable to accelerating its nuclear program? Why?

 

 

Game 1 US Propose Compromise Punish with Sanctions Iran Iran Back Accelerate Retaliate Ассept compromise down nuclear effort US 1 .6 Back Air .3 1-X down strike -.2 1 .4
Transcribed Image Text:Game 1 US Propose Compromise Punish with Sanctions Iran Iran Back Accelerate Retaliate Ассept compromise down nuclear effort US 1 .6 Back Air .3 1-X down strike -.2 1 .4
Expert Solution
Step 1

Players: {US, Iran}

Strategy US : {Propose Compromise Back Down, Propose Compromise Air Strike, Punish with sanction Back Down, Punish with sanction Air Strike}

Lets denote:

Propose Compromise = PC 

Punish with sanction = PS

Back down= BD

Air Strike= AS

Accept compromise = AC

Accelerate nuclear effort= NE

Retaliate = RE

Now,

StrategyUS = {PC BD, PC AS, PS BD, PD AS}StrategyIran = {AC BD, AC RE, NE BD, NE RE}

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