plese do every part and show work or explain. thank you Consider the following g
ID: 1156876 • Letter: P
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plese do every part and show work or explain. thank you
Consider the following game, in which Greg is deciding whether to ask Jane on a date. Jane has private information: she is either interested in Greg or not interested in Greg Greg doesn't know whether Jane is interested, but he thinks there is a 25% chance she is interested and will accept a date invitation. The game is: NATURE Interested p0.25 ot interested p-0.75 Greg not invite Invite Invite Jane Jane 4 4 0 0 10 la) What is the type space in this game? 1b) Give an example of a strategy for Jane 1c) Give an example of a strategy for Greg ld) Find a Bayesian Nash equilibrium of this gameExplanation / Answer
While classical economics believed in the Say's law of market i.e. in the concept of "supply creates its own demand", Keynes refuted this law and maintained that not all income earned by factor owners are spent in buying products they produce..some of it is being saved. And as a result of savings, a deficiency of demand is created. This deficient demand leads to unemployment in the economy, as opposed to classical assumptions of full employment. Keynes' refutation of the Say's law was based on the depression of 1930s where there was insufficient demand for goods produced.
If my workplace produced any specific commodity, say good X, then it may not always be the case that all the production gets demanded. In the real world, wages and prices are not flexible (as assumed by classical economists). Also, savings and inestments are two different functions. Any amount that is saved is not necessarily invested (sometimes people derive utility from keeping money in their lockers. It is also the case in many countries where people save money to invest in luxurious final consumptions like gold and diamonds, which may not have any future productive value). Due to this saving-inestment gap, demand deficiency and consequently unemployment is bound to happen.
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