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Suppose police and citizens play the following game, where a, b, c, x, y, z > 0 and x > z. Police can choose to
Suppose police and citizens play the following game, where a, b, c, x, y, z > 0 and x > z. Police can choose to stop or not stop a citizen, and a citizen can choose to carry or not carry contraband. If the police stops and the citizen carries the payoffs are a and -x respectively. If the police stops and they do not carry, the payoffs are -b and -z respectively. If the police does not stop and the citizen carries the payoffs are -c and y respectively. if the police does not stop and citizen does not carry the payoffs are 0 and 0. Let be the probability that the police plays stop, and be the probability that the citizen plays carry. Solve for the mixed strategy Nash Equilibrium values of and ( will be a function of x, y, and z, and will be a function of a, b, and c). (c) Show that is decreasing in a and c, but increasing in b. Briefly give an interpretation for what that means
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