Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Mr. and Mrs. Ward typically vote oppositely in elections and so their votes cancel each other out. They each gain 14 units of utility from

Mr. and Mrs. Ward typically vote oppositely in elections and so their votes "cancel each other out." They each gain 14 units of utility from a vote for their positions (and lose 14 units of utility from a vote against their positions). However, the bother of actually voting costs each 7 units of utility. The following matrix summarizes the strategies for both Mr. Ward and Mrs. Ward.

Mrs. Ward

Vote

Don't Vote

Mr. Ward

Vote

Mr. Ward: -7,Mrs. Ward: -7

Mr. Ward: 7,Mrs. Ward: -14

Don't Vote

Mr. Ward: -14,Mrs. Ward: 7

Mr. Ward: 0,Mrs. Ward: 0

The Nash equilibrium for this game is for Mr. Ward to_____________(not vote, vote)and for Mrs. Ward to______________(not vote, vote). Under this outcome, Mr. Ward receives a payoff of____________________ units of utility and Mrs. Ward receives a payoff of __________________ units of utility.

Suppose Mr. and Mrs. Ward agreed not to vote in tomorrow's election.

True or False: This agreement would increase utility for each spouse, compared to the Nash equilibrium from the previous part of the question.

True

False

This agreement not to vote_________________(is, is not)a Nash equilibrium.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Charles T. Horngren, Jr. Harrison, Walter T.

2nd Edition

0133118207, 978-0133118209

Students also viewed these Economics questions