Principles of Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134421315
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 14, Problem 3.4P
(a)
To determine
Pay-off matrix.
(b)
To determine
Dominant strategy
(c)
To determine
Decision.
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Jane and Bill are apprehended for a bank robbery. They are taken into separate rooms and questioned by the police about their involvement in the crime. The police tell them each that if they confess and turn the other person in, they will receive a lighter sentence. If they both confess, they will each be sentenced to 30 years. If neither confesses, they will each receive a 20-year sentence. If only one confesses, the confessor will receive 15 years and the one who stayed silent will receive 35 years. The table below represents the choices available to Jane and Bill. If Jane trusts Bill to stay silent, what should she do? If Jane thinks that Bill will confess, what should she do? Does Jane have a dominant strategy? A = Confess; B = Stay Silent. (Each results entry lists Janes sentence first (in years), and Bill's sentence second.) A A (30,30) A B (35,15) B A (15, 35) B B (20, 20)
Jane and Bill are apprehended for a bank robbery. They are taken into separate rooms and
questioned by the police about their involvement in the crime. The police tell them each that if they
confess and turn the other person in, they will receive a lighter sentence. If they both confess, they
will be each be sentenced to 30 years. If neither confesses, they will each receive a 20-year sentence.
If only one confesses, the confessor will receive 15 years and the one who stayed silent will receive
35 years. Table 10.7 e below represents the choices available to Jane and Bill. A = Confess; B = Stay
Silent. (Each results entry lists Bill's sentence fırst (in years), and Jane's sentence second). Answer the
following:
Jane
A
B
A
(30, 30)
(15, 35)
Bill
(35, 15)
(20, 20)
Table 10.7
a) If Jane trusts Bill to stay silent, what should she do?
b) If Jane thinks that Bill will confess, what should she do?
c) Does Jane have a dominant strategy? Does Bill have a dominant strategy? Justify your answer.
Jane and Bill are apprehended for a bank robbery. They are taken into separate rooms and questioned by the police about their involvement in the crime. The police tell them each that if they confess and turn the other person in, they will receive a lighter sentence. If they both confess, they will be each be sentenced to 30 years. If neither confesses, they will each receive a 20-year sentence. If only one confesses, the confessor will receive 15 years and the one who stayed silent will receive 35 years. The table below represents the choices available to Jane and Bill.
If Jane trusts Bill to stay silent, what should she do? A = Confess; B = Stay Silent (Each results entry lists Janes's sentence first (in years), and Bill's sentence second.)
Jane
A
B
Bill
A
(30, 30)
(15, 35)
B
(35, 15)
(20, 20)
Chapter 14 Solutions
Principles of Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (12th Edition)
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