Nash equilibria.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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One of the critical moments early on in the The Lord of the Rings trilogy is the meeting in Rivendell to decide who should take the One Ring to Mordor. Gimli the Dwarf won’t hear of an Elf doing it, whereas Legolas (who is an Elf) feels similarly about Gimli. Boromir (who is a Man) is opposed to either of them taking charge of the Ring. And then there is Frodo the Hobbit, who has the weakest desire to take the Ring but knows that someone must throw it into the fires of Mordor. In modeling this scenario as a game, assume there are four players: Boromir, Frodo, Gimli, and Legolas. (There were more, of course, including Aragorn and Elrond, but let’s keep it simple.) Each of them has a preference ordering, shown in the following table, as to who should take on the task of carrying the One Ring.

Of the three non-Hobbits, each prefers to take on the task himself. Each would prefer that other than themselves and Frodo, no one should take the Ring. As for Frodo, he doesn’t really want to do it and prefers to do so only if no one else will. The game is one in which all players simultaneously make a choice among the four people. Only if they all agree—a unanimity voting rule is put in place—is someone selected; otherwise, no one takes on this epic task. Find all symmetric Nash equilibria.

Preference Rankings for The Lord of the Rings
Person
First
Second
Third
Fourth
Fifth
Boromir
Boromir
Frodo
No one
Legolas
Gimli
Gimli
Gimli
Frodo
No one
Boromir
Legolas
Legolas
Legolas
Frodo
No one
Gimli
Boromir
Frodo
Legolas
Gimli
Boromir
Frodo
No one
Transcribed Image Text:Preference Rankings for The Lord of the Rings Person First Second Third Fourth Fifth Boromir Boromir Frodo No one Legolas Gimli Gimli Gimli Frodo No one Boromir Legolas Legolas Legolas Frodo No one Gimli Boromir Frodo Legolas Gimli Boromir Frodo No one
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