For parts (a) and (b) below, consider the following two periods in the case for Australia:

Period 1. Pre-stock control measures (February to early March 2020)

Period 2. Stock control measures (mid-March to April 2020) during 'lockdown'

Part (a)

Read the following key article:

https://theconversation.com/a-toilet-paper-run-is-like-a-bank-run-the-economic-fixes-are-about-the-same-133065

You are to construct relevant payoff matrices in relation to period 1.

Firstly, construct a payoff matrix using words, describing each quadrant.

Secondly, from that work on a payoff matrix with some numbers in each quadrant.

To help you construct the payoff matrix, here are the key parameters:

There are two players - player 'a' you, and player 'b' everyone else.

There are two strategies - panic buy or act normally.

Each strategy has an associated payoff.

Think of this as a non-cooperative, simultaneously played game: this is a game played once and is repeated more than once, yet the rules, players, and payoffs are the same each time. Assume players have self-regarding preferences.

Thirdly, all you need to do is explain each Nash equilibrium in the numerical payoff matrices.

Part (a) of the assessment should be mostly straight forward.

Explanations of the graphical payoff matrices (paying attention to all the relevant strategies and economic outcomes) based on the key article.

[up to 10 marks for drawing correctly the two matrices and quality of explanation of the game theory particulars] 300 to 400 or so words is the suggested amount for part (a)

Explanations of each Nash equilibria: 300 to 400 or so words for this part of explanation

Part (b)

Read the following key article:

https://theconversation.com/the-game-theory-of-panic-buying-and-how-to-reduce-it-134107

In period 2 evaluate the efficiency and equity aspects of the organisational policy when companies restricted sales (e.g. placing limits on hand sanitiser to just two bottles per customer). Undertake a small amount of research online to see what measures were undertaken by the supermarkets. In your analysis, discuss the role of preferences amongst the players and how this affects the allocation. (note: there is no need to construct payoff matrices for part (b)).

Part (b) should be a little more challenging as there is a bit of investigative reading to undertake as well as some 'policy' evaluation.

Evidence of an evaluation of the measures undertaken by the supermarkets vis-a-vis efficiency and equity (i.e. fairness). The research process and examples elaborated on should help inform the policy evaluation.

[up to 4 marks on the quality of the evaluation given]

[up to 1 mark for a discussion on the types of preferences amongst the main players identified in the research]

400 to 600 or so words is the suggested amount for part (b)

Part (c)

As an extension, read the following key article on what happened in the United States in early March 2020:

https://www.nytimes.com/2020/03/14/technology/coronavirus-purell-wipes-amazon-sellers.html

You are to construct a relevant payoff matrix (with numbers only) in relation to the first few days of March 2020 and consider first mover advantages of the game played sequentially. In this game, there are two players - player 'a' and player 'b'. Player 'a' is a representative hoarder (buyer come seller). Player 'b' is a representative single buyer. Assume players are acting rationally. You will need to work out what the two strategies are and the associated numerical (hypothetical) payoffs. In your analysis, discuss the role of preferences amongst the players and how this affects the allocation.

Part (c) of the assessment brief is meant to be the more challenging aspect.

Explanations of the graphical payoff matrix (paying attention to the relevant strategies and economic allocations).

[up to 3 marks for the key payoff matrix drawn correctly, illustrating the relevant game theory strategy and quality of explanation of the game theory particulars]

[up to 2 marks for a discussion on the types of preferences amongst the players in the key article]

300 to 400 or so words is the suggested amount for part (c