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Prisoner's dilemma: Please answer the following question EXERCISE 27.1 (Variant of Prisoner's Dilemma with altruistic preferences) Each of two players has two possible actions, Quiet

Prisoner's dilemma:

Please answer the following question

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EXERCISE 27.1 (Variant of Prisoner's Dilemma with altruistic preferences) Each of two players has two possible actions, Quiet and Fink; each action pair results in the players' receiving amounts of money equal to the numbers corresponding to that action pair in Figure 26.1. (For example, if player 1 chooses Quiet and player 2 chooses Fink, then player 1 receives nothing, whereas player 2 receives $3.) The players are not "selfish"; rather, the preferences of each player i are represented by the payoff function mi(a) + am; (a), where m;(a) is the amount of money received by player i when the action profile is a, j is the other player, and a is a given non- negative number. Player I's payoff to the action pair (Quiet, Quiet), for example, is 2+ 2x. a. Formulate a strategic game that models this situation in the case a == 1. Is this game the Prisoner's Dilemma? b. Find the range of values of a for which the resulting game is the Prisoner's Dilemma. For values of a for which the game is not the Prisoner's Dilemma, find the Nash equilibria.

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