Battle of the Sexes Game Model

Question 1

What are the general features of the “Battle of the Sexes”?

Answer 1

Players tend to play the same strategy as the other player
No dominant strategy
Two equilibria - (A,A) ; (B,B)
In each equilibirum the person playing their favourite “strategy” is better off.

Question 2

Is there a dominant strategy in the Battle of the sexes? If not can you give some ideas about what might be expected to happen?

Answer 2

This is a cooordination game: there is no dominant strategy.
It is, therefore, hard to tell what might happen if the game is only played once:
Players may try and guess what the other will do and play the same
Possibility of miscoordination
Any outcome is feasible
Long run –> (A,A) ; (B,B)

Question 3

Explain how this illustrates a coordination problem in a Battle of the Sexes Model with reference to two real world examples?

Answer 3

A firm some some free cash flow to allocate to either: Division A, Division B or shareholders.
Managers of A and B must lobby for resources
If managers do not agree then cash flow released as dividend
Managers are incentivised by division and company bonuses
would prefer to allocate resources to their own division but both prefer for it to stay within the firm.

Other examples: would include Format wars (HD DVD vs. Blu-ray)

Question 4

Descrive three ways that might be used to solve the coordination problem?

Answer 4

How to solve the co-ordination problem? 
Need some way to solid expectations 
1). reputation
2). Signalling Communication
3). Convention
4). Commitment