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] Consider the following game, traditionally known as Hume's Marsh-Draining Dilemma. Two farmers have fields sitting next to a marshland infested by mosquitos. If the
] Consider the following game, traditionally known as Hume's Marsh-Draining Dilemma. Two farmers have fields sitting next to a marshland infested by mosquitos. If the farmers choose to drain the marsh they would both benefit. But each farmer has an incentive to free ride on the other farmer's effort. Assume the preferences can be represented by the following payoff struc-ture for each player: F > M > D > U, where M stands for mutual cooperation (drain marsh), D stands for mutual defection (neither drains marsh), F stands for free-riding (let the other farmer drain the marsh), and U stands for unreciprocated cooperation (drain the marsh when the other farmer does not). FARMER B DO NOT DRAIN MARSH DRAIN MARSH DO NOT DRAIN MARSH D, D F, U DRAIN MARSH U, F M, M (a) Find the Nash equilibrium to this game. Justify your answer and make reference to specific readings covered in class. (b) Present real world policy examples represented by this game. Discuss possible solutions that would lead to Pareto improving outcomes
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