Nash equilibrium

There are two points to be made here: 1. Both parties have a dominant strategy, which is to confess. Thus, the equilibrium is for both to confess. This is also the Nash equilibrium (why?). 2. A cooperative surplus exists. If both confess, they are not cooperating. Thus, the equilibrium is the non-cooperative solution. If they both refused to confess then they would both get 2 years in prison and not 10 years. Why don’t they cooperate? The answer…

The Six day war of 1967 was unquestionably one of the most awesome things to happen in modern history. The events of the rapid war are still studied today in military academy’s world wide. The war even took on spiritual dimension for the nation of Israel, who had mostly secular motivations until that point. However, what is perhaps the most interesting is the political and strategic choices and consequences of the war. The dynamics of power in the Middle East were forever changed by a few simple…

1. Why are most construction companies small in size? Based on the explanation given in previous lectures of COSC 620 course. The size of construction companies is based on the theory of ‘Economies of Scale’. The concept of ‘Economies of Scale’ is originated from microeconomics, which states that there are more advantages for organizations/enterprises to run at a larger scale to minimize the impact of risk and spread out overheads/cost overruns. For example a smaller company handling less…

Public law should also allow discrimination in customer selection. This will help the healthcare insurance industry to reach long term equilibrium. Additionally, adverse selection refers to the problem of hidden information. It means that one side of the market has more information than the other side of the market. In the market for healthcare insurance, the seekers of insurance have more…

Economy drives people to seize opportunities and growth, words that are being loosely defined by some companies. The feasibility of European Union’s single market lies in the strict compliance of its trade agreements, its imposition, and monitoring. Anticompetitive activities like limiting production, mergers, price fixing and cartels undermines the Union’s common market. This paper will explore the European truck manufacturer’s cartel case. The truck manufacture’s collusion to fix their…

The 2008 financial crisis is considered to be the worst financial crisis since the Great Depression in 1930. Witnessing the turmoil it followed, sparked an interest within me in the power of money. As I started to mature, I realized that knowledgeable individuals who understand the monetary and banking systems are capable of taking huge financial decisions, whether at the governmental level or a private business. I aspired to be such an individual. Such enthusiasm in me provoked me to have my…

Q1. A challenge identified in the article is taking a comprehensive approach to green employment. It means that many U.S. cities invest money and time into creating green jobs. Green jobs are defined as industries produces goods and services with an environment benefit (Mark M., Jonathan R., and Devashree S., 4). The challenge is to ensure strategy for green business development, increase the demand for green products and create new jobs opportunities to ensure the workforce training programs…

The neoclassical economic model gives an exceptionally fulfilling clarification of why parties are willing to join hands and enter into a contracts. Parties enter into contracts with their own free will without any coercion. Hence each party will enter into a contract only if its anticipated benefits are greater than the expected costs. For example assume that a house owner offers to pay a painter $5,000 to paint her home. The house owner must expect the value of the benefits she receives from…

The story takes off as John Nash, a Ph.D. Student at Princeton University, arrives as the co-recipient of the Carnegie Scholarship bent on finding a fresh equation that would stupefy the masses and fulfill his purpose of accomplishment. It is on his first arrival when his first Hallucinations begins to make himself apparent. Charles Herman, who in Johns' head is his roommate constantly reminds him of his basic needs for food, beer, society, and fun ultimately giving him companionship when he is…

producers, and they cannot prohibit the consumption of goods that they deem immoral. Many citizens see direct benefits from smuggling. It gives citizens access to a larger bundle of goods and it moves the domestic market equilibrium quantity and price closer to the free trade equilibrium. Smuggling has adverse effects on society as it facilitates the growth of corruption, undermine can the rule law, and fund illegal crime syndicates. Depending on the different magnitudes of these…