04. A government can pursue three policies: x, y or z. The monetary values attac
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04. A government can pursue three policies: x, y or z. The monetary values attached to these policies by two interest groups, A and B are as follows: Interest group A puts monetary value 0 to policy x, 10 to policy y and -100 to policy Z. Interest group B puts monetary value 0 to policy x, -100 to policy y and 10 to policy Z. To persuade the government to choose a particular policy, each interest group can make a promise of payment to the government, along with a proposed policy. The government chooses the policy proposed by the group that promises to make the highest payment. The winner group then makes its promised payment to the government, and the losing group makes no payment. The net payoff to each interest group is the value it attaches to policy chosen minus In case of a tie in the promised amounts, the government chooses the policy favored I claim that this game has a Nash equilibrium, in which lobby A says it will pay 110 the payment it makes. by the group whose name comes first in the alphabet. for y and lobby B says it will pay 110 for z. Is this claim true? Fully explain your answer. (25 points)Explanation / Answer
This claim is genuine on the grounds that Nash Equilibrium is an idea is an answer for a diversion in which at least two players have a methodology, and with every member considering a rival's decision, he has no motivating force, nothing to pick up, by exchanging his procedure. In the Nash Equilibrium, every player's procedure is ideal while thinking about the choices of different players. Each player wins on the grounds that everybody gets the result they want. To rapidly test if the Nash theory exists, uncover every player's methodology to alternate players. On the off chance that nobody changes his system, at that point, the Nash Equilibrium is demonstrated.
For instance, envision an amusement amongst Tom and Sam. In this basic amusement, the two players can pick technique A, to get $1, or methodology B, to lose $1. Consistently, the two players pick procedure An and get a result of $1. In the event that you uncovered Sam's technique to Tom and the other way around, you see that no player veers off from the first decision. Knowing the other player's turn implies close to nothing and doesn't change either player's conduct. The result An, A speaks to a Nash Equilibrium
The Prisoner's Dilemma is a typical circumstance investigated in Game Theory that can utilize the Nash Equilibrium. In this amusement, two lawbreakers are captured and each is held in isolation without any methods for speaking with the other. The prosecutors don't have the proof to convict the combine, so they offer every detainee the chance to either sell out the other by affirming that the other carried out the wrongdoing or participate by staying quiet. In the event that the two detainees sell out each other, every serve five years in jail. In the event that A double-crosses B yet B stays quiet, detainee An is without set and detainee B serves 10 years in jail or the other way around. On the off chance that each remaining parts quiet, at that point every serve only one year in jail. The Nash balance in this illustration is for the two players to sell out each other. Despite the fact that shared participation prompts a superior result on the off chance that one detainee picks common collaboration and alternate does not, one detainee's result is more regrettable.
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