Create a payoff matrix that has two parties – Britain and the European Union. Co
ID: 3260500 • Letter: C
Question
Create a payoff matrix that has two parties – Britain and the European Union. Consider the trade negotiations that are taking place right now, as Brexit comes into full force. Now come up with strategies and payoffs (these payoffs can be in whatever terms that is appropriate in your scenario) and you should have at least two strategies for each party. Discuss the potential equilibrium outcome(s) in your payoff matrix. Indicate if the games are repeated and how many times. Each of you will therefore have a different payoff matrix and so there is not one right answer. Present your payoff matrix, and discuss your payoff matrix and the equilibrium solution(s) in detail. (Note that if you would like to present multiple payoff matrices or have multiple stage games, that is fine with me!)
Explanation / Answer
There are two parties Britain and Europe
Britain has two strategies : create new export import rules or let the trade norms be same
similarly Europe too has two strategies: reduce the trade with Britain or to continue in same fashion.
If we look for payoffs, we have following four scenarios :
If europe decides to reduce trade:
Tnew new rules of export and import need to designed in a manner to make maximu profit and enhance trade. There seems to be some no gain no loss in this situation
If trade rules of Britain stay , same surely there is going to be financial loss on both the ends
.
If europe continues the same trade relations with Brtain:
The new import export rules , may bring in fresh and better trade relations between the two nations. Commercially both of them would flourish and be in competitive environment like other country trades
Now in case if both the countries continue having same relations, they might have same financial profit as earlier.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.