ISIS Terrorist

Law abiding (y) attempt crime (1-y)

Shirk (a) 4,4 -10, 10

FBI

Police vigorously (1-a) -6, 6 -4, -20

pay-offs: FBI, potential criminal

A) Does either player have a dominant pure strategy? Explain.

B) Is there a Nash Equilibrium for a pure strategy? Explain.

C) Use the pay-off equating method to solve for the optimal probabilities that the FBI should shirk (a), and the terrorist should be law abiding. Show work.

D) Next, suppose the FBI had to pick one strategy. They had to either shirk or police vigorously. If no mixed strategy play were allowed, and the police went first in this game, which choice would they choose? Why?

E) Suppose the pay-off -20 were changed to -100, who would change their behavior? why would they change their behavior? How would they change their behavior? Explain and calculate the new probabilities where applicable.

F) What would happen to the crime rate when the payoff changes from -20 to -100??