Economic questions Assignment Example | Topics and Well Written Essays - 1000 words

Economic questions - Assignment Exampleect an gap of zero units, but at an offer of one unit they go out accept it if they be self-interested and risk-neutral because it is one more unit than they would be acquiring if they rejected the one unit offer.c) The subgame perfect Nash equipoise does not match the actual behavior at all. The different assumptions we undersurface make in part a to explain this is basically that if people tint that the amount they argon getting is unfair, they will try to hurt the other person as comfortably as themselves by making sure nobody gets anything.2- In this situation, the drug-dealers best option is to go to the park because if the officer is at the park the dealer will still make 50 deals whereas if they are both on the street he will only make 30 deals. The officer can do better if she stays on the street but knows the drug dealer will do better at the park given that they both choose the same place. Therefore, the most likely comeback wo uld probably be the bottom right square where 50 deals are made and 120 are stopped. However, Player Two has a bigger payoff when they are at different locations. Because of this, a mixed-strategy Nash equilibrium shows that the dealer would add up about 100 deals, meaning the officer would be able to stop an average of 70 deals.If Player Two is self-regarding, Player One will avail more from sending payment if Player Two delivers (P,D). In this situation Player One will also make a profit if they take int send payment and Player Two delivers (NP, D). In the other ii situations Player One & Player Two will benefit equally (NP,K) and Player One will lose in the payment non delivery situation (P,K).If Player Two is reciprocal, Player Two stands to benefit more from a payment and delivery situation (P,D), as well as benefiting more from a payment and non-delivery situation and a non-payment, non-delivery situation (NP, K). The only situation where Player one benefits more is wher e they dont pay but the item is still delivered (NP,