Suppose country A and B are in a Prisoner's Dilemma game about climate emissions i.e. the benefits to both are biggest if both abate. However, each country's best strategy is to pollute but if both pollute then both are worse off. • Set up a game theory model to reflect this interaction between the 2 countries. Extend this framework to describe how cooperation can be achieved in this domain. ⚫ Summarize the insights in this domain to induce cooperation between these 2 countries to reduce their emissions.

ENGR.ECONOMIC ANALYSIS
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Author:NEWNAN
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Chapter1: Making Economics Decisions
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Suppose country A and B are in a Prisoner's Dilemma game about climate emissions
i.e. the benefits to both are biggest if both abate. However, each country's best strategy
is to pollute but if both pollute then both are worse off.
• Set up a game theory model to reflect this interaction between the 2 countries.
Extend this framework to describe how cooperation can be achieved in this
domain.
⚫ Summarize the insights in this domain to induce cooperation between these 2
countries to reduce their emissions.
Transcribed Image Text:Suppose country A and B are in a Prisoner's Dilemma game about climate emissions i.e. the benefits to both are biggest if both abate. However, each country's best strategy is to pollute but if both pollute then both are worse off. • Set up a game theory model to reflect this interaction between the 2 countries. Extend this framework to describe how cooperation can be achieved in this domain. ⚫ Summarize the insights in this domain to induce cooperation between these 2 countries to reduce their emissions.
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