Question 1

Short Response 1. Three city politicians vote on whether to allow themselves a salary increase of $2,500 per year; if at least two of the politicians vote in favour of the increase, then it is implemented. However, a politician who votes for a salary increase faces public scorn from citizens. Assume that public scorn costs a politician $1,000 per year. Suppose that the politicians vote at the same time, and cannot observe each others' voting (that is, this is a simultaneous game). What is this game's Nash equilibrium? (Hint: there is more than one.) (60%)