The mayor of Green City is considering whether to institute a Covid vaccine mandate for public employees. The fire chief opposes vaccination, and has threatened to resign if a mandate is instituted. The mayor believes that instituting a mandate is critical to getting Covid under control, and thus not instituting the mandate would costs the city -50 utility. However, the fire chief is critical to maintaining public safety. If the fire chief resigns, it would cost the city 75 utility. The fire chief believes a mandate would be an invasion of his personal freedom, costing him 20 utility. The mandate only impacts the fire chief if he does not resign. However, resigning his job as fire chief would cost him 40 utility. Draw this game. Identify how many subgames it contains. Then, solve the game to find all subgame perfect Nash equilibria.

There are two players in the game : Mayor , Fire Chief Mayor Has Two strategies : Mandate , Non -…

Answered: The mayor of Green City is considering…

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The mayor of Green City is considering whether to institute a Covid vaccine mandate for public employees. The fire chief opposes vaccination, and has threatened to resign if a mandate is instituted. The mayor believes that instituting a mandate is critical to getting Covid under control, and thus not instituting the mandate would costs the city -50 utility. However, the fire chief is critical to maintaining public safety. If the fire chief resigns, it would cost the city 75 utility. The fire chief believes a mandate would be an invasion of his personal freedom, costing him 20 utility. The mandate only impacts the fire chief if he does not resign. However, resigning his job as fire chief would cost him 40 utility. Draw this game. Identify how many subgames it contains. Then, solve the game to find all subgame perfect Nash equilibria.

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