Question
2. Three city politicians vote on whether to allow themselves a salary increase of $2,500 per year; if at least two of the politicians vote
2. Three city politicians vote on whether to allow themselves a salary increase of $2,500 per year; if at least two of the politicians vote in favour of the increase, then it is implemented. A politician who votes for a salary increase would face public scorn from citizens. Assume that public scorn costs a politician $1,000 per year. Suppose that the politicians vote at the same time, and cannot observe each others’ voting (that is, this is a simultaneous game). What is this game’s Nash equilibrium? Is there more than one? (15%)
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To analyze the game and find the Nash equilibrium lets consider the possible strategies and payoffs for each politician There are three politicians an...Get Instant Access to Expert-Tailored Solutions
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Intermediate Microeconomics
Authors: Hal R. Varian
9th edition
978-0393123975, 393123979, 393123960, 978-0393919677, 393919676, 978-0393123968
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