Economic development is a zero-sum game: if some people in market economies are able to get wealthy, they must be able to do so only if they are stealing from the rest of the population, and therefore the rest of the population must become poorer. Group of answer choices True False
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Economic development is a zero-sum game: if some people in market economies are able to get wealthy, they must be able to do so only if they are stealing from the rest of the population, and therefore the rest of the population must become poorer.
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- The US and Russia have signed a nuclear no-proliferation agreement to limit arms race. Each country can cooperate or defect now. If both cooperate, their payoff is 1000 each but if both defect, it drops to 600. If one cooperates and the other defects, they receive X and 1000-X respectively, where X represents the payoff of a normal country and 1000-X the payoff of the world leader. The only rational solution is cooperation if X is equal to -200 200 500 700Whose work on decision making received a 2002 Nobel Prize?The Dictator of Abydos is worried that the population might protest or rebel, as neighboring countries have recently undergone revolution. The population is similarly inspired to consider rebellion. The Dictator must decide whether to go ahead and repress, do nothing, or step down peacefully. The population has three options: do nothing, engage in mass protest, or violently revolt. These choices must be made simultaneously, without observing what the other player chose. The dictator will lose power if they step down peacefully or the population revolts. However, repression would successfully overpower a revolt, allowing the dictator to retain power. The dictator values their position at 50 utility, which they would lose if they lose power. They would also lose an additional 100 utility if they are ousted in a revolt, as they would imprisoned. The population would gain 50 utility if the dictator steps down and 30 utility if the dictator is ousted in a revolt. Repression would cost each…
- Consider a model of revolutions. Society is made up of N > 1 people. Simultaneously, each person chooses whether or not to participate. If n people participate, the probability the revolution succeeds is n/N. If the revolution succeeds, each member of society receives the benefits of a public good worth B. In addition, each person who participated in the revolution receives a benefit R if the revolution succeeds. (This extra benefit called a club good, might represent special access to government jobs for people who helped unseat the government once the new government is formed, or it might just represent an expressive benefit of participating in a victorious revolution.) The cost of participating is c > 0. Assume that R > c and that B + R < N × c. (a) Write down a player’s best response correspondence. (b) Identify all of the pure strategy Nash equilibria of this game. (c) Calculate the utilitarian payoff associated with each equilibrium. (d) Does this game…Consider a model of revolutions. Society is made up of N > 1 people. Simultaneously, each person chooses whether or not to participate. If n people participate, the probability the revolution succeeds is n/N. If the revolution succeeds, each member of society receives the benefits of a public good worth B. In addition, each person who participated in the revolution receives a benefit R if the revolution succeeds. (This extra benefit called a club good, might represent special access to government jobs for people who helped unseat the government once the new government is formed, or it might just represent an expressive benefit of participating in a victorious revolution.) The cost of participating is c > 0. Assume that R > cand that B + R < N × c. a. Suppose a player believes n other people will participate. What is her expected utility from participating? b. Suppose a player believes n other people will participate. What is her expected utility from not participating? (c)…In the question that follows, n refers to the number of people rather than a fraction of the population. In the land of Pampa, living in the countryside gives you a fixed payoff of 100 (Pampa has lots of land), while living in a city gives you a payoff that first increases with the number of people living in the city (agglomeration), and then declines after the number of people goes above a certain threshold (congestion). Let us write this payoff as r = 20n - n²/2, where n is the number of city dwellers in that particular city. (a) Let N be the total population in Pampa. If only one city can exist in the entire country, trace out the set of equilibria (i.e., population allocations between countryside and city) as N varies from 0 to infinity. (b) Now suppose that new cities can come up, each yielding exactly the same payoff function as above. Focus on the equilibrium in each case with the maximum possible city dwellers, and explain how this equilibrium will move with the overall…
- Evolutionary game theory provides a framework for understanding the emergence of preferences and behavior. Why are theoretical methodologies that employ the rational actor model an evolutionary stable strategy for economists?100 people are choosing between two beaches to go to in the Florida Keys. Beach L is big and never gets crowded, but it is not very nice; the utility from going to Beach L is u(L) = 60. Beach M is much nicer but very small, so it gets crowded; the utility from going to Beach M is u(M) = 100-NM ; NM is the number of people that %3D go to Beach M. 5) The Nash equilibrium number of people that go to Beach L is A) 20 B) 40 C) 60 D) 80 E) 100 5).Suppose there are two criminals who are thinking about robbing either an insurance company or a liquor store. The take from the insurance company robbery would be Gh50,000 each, but the job requires two people (one to do the robbing and one to drive the getaway car). The take from robing a liquor store is only $1000 but can be done with one person acting alone or both. What are the strategies of these players (the two criminals)? b. Write this situation in a normal game form assuming they are acting simultaneously. What are the equilibria for this game? (Note: Both Pure strategy and Mixed strategy) а. с.
- Each actor has two possible actions: reduce greenhouse-gas emissions or increase emissions. Each player's payoffs for various combinations of actions are shown in the cells: by convention, the row player (EU)'s payoffs are shown first, and the column player (China)'s payoffs are shown second. Based on this matrix, which of the following statements are true? A.The EU is better off reducing its emissions, but only if China also reduces its emissions B. China is better off increasing its emissions, but only if the EU also increases its emissions C.Both China and the EU are better off increasing their emissions, whatever the other player does D.All of the above E.None of the aboveIn a standard economic model, we generally assume the individual only cares about their own payoff. So, for example, utility of individual i is given by u = pi, where pi is the individual’s payoff. Suppose the individual is playing a dictator game with another partner j. How would you modify the utility function to explain the non-zero allocations to the partner that are typically observed?The conventional wisdom for urban economic development is: “Don’t put all your eggs in one basket. Diversify the economy.” To explain the idea of diversification, consider old McDonald, who must carry a dozen eggs from the barn to the house. The ground between the barn and the house is slippery, so there is a 50 percent chance that McDonald will slip on a given trip and break all the eggs in his basket. Consider two strategies: a one-basket strategy (a single trip with all 12 eggs) and a two-basket strategy (two trips, with 6 eggs per trip). INDEPTH ANSWERS. Questions= (1.)List all of the possible outcomes under each of the strategies. Question (2.)What is the expected number of delivered (unbroken) eggs under each strategy ? Question (3.)What are the trade-offs between the two strategies? If you were McDonald, which strategy would you adopt? Question (4.)What are the lessons for economic development strategies?