Two politicians from the same party decide whether to support or oppose the gov- ernment's environmental policy. Politician A prefers that they both support, but Politician B prefers that they both oppose. Both politicians agree that the party should have a coherent position and the worst outcome is that one supports and the other opposes the policy. (a) Formulate this situation as a strategic game - specify the players, actions, and payoffs (you can set-up a table of the actions and payoffs). (b) What are the Nash equilibria of this game? Explain your answer.

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
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Chapter8: Game Theory
Section: Chapter Questions
Problem 8.9P
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Two politicians from the same party decide whether to support or oppose the gov-
ernment's environmental policy. Politician A prefers that they both support, but
Politician B prefers that they both oppose. Both politicians agree that the party
should have a coherent position and the worst outcome is that one supports and the
other opposes the policy.
(a) Formulate this situation as a strategic game - specify the players, actions, and
payoffs (you can set-up a table of the actions and payoffs).
(b) What are the Nash equilibria of this game? Explain your answer.
Transcribed Image Text:Two politicians from the same party decide whether to support or oppose the gov- ernment's environmental policy. Politician A prefers that they both support, but Politician B prefers that they both oppose. Both politicians agree that the party should have a coherent position and the worst outcome is that one supports and the other opposes the policy. (a) Formulate this situation as a strategic game - specify the players, actions, and payoffs (you can set-up a table of the actions and payoffs). (b) What are the Nash equilibria of this game? Explain your answer.
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