Question
There are two types of people in a society: friend-makers (doves) and haters (hawks). Members of this society interact with other members randomly, one to
There are two types of people in a society: "friend-makers" ("doves") and "haters" ("hawks"). Members of this society interact with other members randomly, one to one. When two friend-makers interact, each earns 3 units. When two haters interact, each earns 0 units. When a friend-maker and a hater interact, the former gets 1 unit, the latter receives 5 units. Questions: 1) what is the mathematical expectation of payoff for haters and friend-makers? Which strategy is more beneficial for an individual? 2) Which strategy could be better for total social welfare? 3) Based on question one, what will be the equilibrium population shares of each group? 4) If the share of haters is 60% of society and the share of friend-makers is 40% of society, how the mathematical expectations for payoffs will change, for both strategies?
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