Bundle: Principles of Microeconomics, Loose-Leaf Version, 7th + Aplia, 1 term Printed Access Card
7th Edition
ISBN: 9781305135444
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 22, Problem 7PA
Subpart (a):
To determine
Applying Borda count and Arrow’s impossibility theorem.
Subpart (b):
To determine
Applying Borda count and Arrow’s impossibility theorem.
Subpart (c):
To determine
Applying Borda count and Arrow’s impossibility theorem.
Subpart (d):
To determine
Applying Borda count and Arrow’s impossibility theorem.
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Marie and Mike usually vote against each other’s party in the SSC elections resulting to negating or offsetting their votes. If they vote for their party of choice, each of them gains four units of utility (and lose four units of utility from a vote against their party of choice). However, it costs each of them two units of utility for the hassle of actually voting during the SSC elections.
Can you explain the scenario above?
Mr. and Mrs. Ward typically vote oppositely in elections and so their votes "cancel each other out." They each gain 24 units of utility from a vote for
their positions (and lose 24 units of utility from a vote against their positions). However, the bother of actually voting costs each 12 units of utility.
The following matrix summarizes the strategies for both Mr. Ward and Mrs. Ward.
Mr. Ward
Vote
Vote
Mrs. Ward
Mr. Ward: -12, Mrs. Ward: -12
Don't Vote Mr. Ward: -24, Mrs. Ward: 12
The Nash equilibrium for this game is for Mr. Ward to
payoff of
Don't Vote
Mr. Ward: 12, Mrs. Ward: -24
Mr. Ward: 0, Mrs. Ward: 0
units of utility and Mrs. Ward receives a payoff of
and for Mrs. Ward to
units of utility.
Under this outcome, Mr. Ward receives a
Two friends are deciding where to go for dinner. There are three choices, which we label A, B, and C.
Max prefers A to B to C. Sally prefers B to A to C.
To decide which restaurant to go to, the friends adopt the following procedure:
First, Max eliminates one of three choices.
Then, Sally decides among the two remaining choices.
Thus, Max has three strategies (eliminate A, eliminate B, and eliminate C). For each of those strategies, Sally has two choices (choose among the two remaining).
a.Write down the extensive form (game tree) to represent this game.
b.If Max acts non-strategically, and makes a decision in the first period to eliminate his least desirable choice, what will the final decision be?
c.What is the subgame-perfect equilibrium of the above game?
d. Does your answer in b. differ from your answer in c.? Explain why or why not.
Only typed Answer
Chapter 22 Solutions
Bundle: Principles of Microeconomics, Loose-Leaf Version, 7th + Aplia, 1 term Printed Access Card
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