ECON 309 Lecture 4: Lecture 4 Game Theory

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3 Feb 2017
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Garden and contribute with a free rider = 2. The game tree shows that the rollback equilibrium would be for emily, nina, and. However, when the game tree changes to show emily, who is selfish, going first followed by. Nina and talia, who are social, the outcome is still the same. Even with emily being selfish, she would still contribute because her payoff is higher because the other two are social. Emily wants to go first to show she will contribute even though she"s selfish, so the others will contribute as well. There is an advantage to moving first. There is also a commitment to be made by moving first. Player 1 is the proposer and player 2 is the responder. Say that there is on the ground, and player 1 gets to propose a split (say and ). Once a proposal has been made, player 2 gets to respond.

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