Exam #2 Flashcards
What is the difference between Sequential and Simultaneous Games?
Sequential games involve players making decisions one after another, while simultaneous games involve players making decisions at the same time.
What is the difference between Action and Strategy?
Action refers to a specific move made by a player, while strategy is a comprehensive plan that outlines a player’s actions in response to potential moves by others.
What is a Best Response?
A Best Response is the strategy that yields the highest payoff for a player, given the strategies chosen by other players.
Define Nash Equilibrium.
Nash Equilibrium is the point where no player can benefit from changing their strategy while the other players keep theirs unchanged.
What are Pure and Mixed Strategies?
Pure strategies involve making a specific choice 100% of the time, while mixed strategies involve randomizing choices among different actions.
What is the significance of Dominant and Dominated Strategies?
A Dominant Strategy is one that is the best choice regardless of what others do, while a Dominated Strategy is worse than another strategy regardless of opponents’ actions.
What is the process of Iterated Elimination?
Iterated elimination involves removing strictly dominated strategies until no further eliminations are possible.
How do you solve Sequential Games?
To solve Sequential Games, draw a game tree and use backward induction to find the rollback equilibrium.
What are Equilibria with non-credible threats?
These are situations where players make threats that they would not actually carry out, requiring a complete contingency plan for later players’ strategies.
What is the approach to solving Simultaneous Games?
Use iterated elimination of strictly dominated strategies and best response analysis to simplify the game matrix.
What is the Prisoner’s Dilemma?
The Prisoner’s Dilemma illustrates a scenario where two players can either cooperate for mutual benefit or defect for individual gain, leading to a suboptimal outcome.
What is a Coordination Game?
In a Coordination Game, both players prefer to take the same action.
What is an Anti-Coordination Game?
In an Anti-Coordination Game, both players prefer to take different actions.
What is the equilibrium in the Volunteer’s Dilemma?
The equilibrium is where one person volunteers while the rest do not.
What is a Mixed-strategy in the Volunteer’s Dilemma?
In a Mixed-strategy, each individual volunteers with some probability p.
What is the implication of the Median Voter Theorem?
If voters have single-peaked preferences, the median voter will have ideal policies, leading to centrist policies being favored over extreme ones.
What does the Tragedy of the Commons address?
It addresses the overpopulation and environmental issues where individual interests conflict with collective welfare.
What solution does Hardin propose for the Tragedy of the Commons?
Hardin suggests a large government with significant power over taxation and reproduction as a solution.
How does Ostrom propose to solve the free-riding problem?
Ostrom suggests allowing binding contracts to address the free-riding problem.
What is the Ultimatum Game?
The Ultimatum Game is a scenario where one player proposes a division of a resource and the other player can accept or reject it.
What is the role of campaign donations according to Fournaies?
Campaign donations are targeted by firms to influence committee leaders and legislative agendas.
What is the Median Voter Theorem?
It states that in an election with an odd number of voters with single-peaked preferences, the median voter’s ideal point is the Condorcet winner.
What are single-peaked preferences?
Each voter has an ‘ideal point’ (most preferred policy), and outcomes further from this point are less preferred.
What is a Condorcet winner?
A policy/candidate preferred to any other in a two-way race by majority vote.
What is the implication of the Median Voter Theorem regarding candidate policies?
Centrist policies beat extreme policies.
What happens when the median voter shifts?
Candidates/policies react to the shift in the median voter.
What did Miller (2008) find regarding women’s suffrage?
When women gained the right to vote, the median voter shifted, as women placed higher weight on child welfare.
What were the findings of Cascio and Washington (2014) regarding the Voting Rights Act of 1965?
The removal of literacy tests led to increased Black voter registration, turnout, and improvements in school quality for Black teens.
What is the theoretical explanation for the increase in state transfers to counties with a higher share of Black population?
Black voters elect Black politicians who redistribute resources, but this cannot solely explain the increase due to not enough Black officials.
What is distributive politics?
Distributing resources to identifiable ‘voting blocs’ to maximize votes.
What is a relevant policy according to the Median Voter Theorem?
Education money to Black schools.
What is the economic theory regarding public goods and free-riding?
If public goods are provided in a decentralized manner, agents should rationally free-ride, justifying taxation by the state.
Why do Australia, Japan, Europe, and California adopt emissions policies?
They adopt these policies voluntarily because voters want them.
What is rational ignorance in the context of voting?
Voters might not know that their individual benefit is less than their individual cost.
What is expressive voting?
Voters vote to show approval or disapproval of candidates/policies without expecting to be pivotal.
What is the expected cost of voting?
The expected cost of voting is P(pivotal) × Cost to you.
What is a common resource?
A common resource is finite and non-exclusive, such as clean air or fishing stock.
What is the tragedy of the commons?
The tendency to overuse common resources.
What is a proposed solution to the tragedy of the commons?
Assign property rights.
What is the reverse argument regarding pollution?
The solution could be mutually agreed-upon taxation.
What does Hardin (1968) state about breeding?
“Freedom to breed is intolerable.”
What is the free-rider problem?
It refers to the challenge of governing common resources effectively.
What caution does Ostrom advise regarding game theory models?
We should be careful when applying findings from simple game theory models to natural settings.
What do current policy prescriptions suggest about government powers?
Governments will impose coercive powers, which requires them to have full information.
What is the role of binding contracts in solving the prisoner’s dilemma?
Allowing for binding contracts can ‘solve’ the prisoner’s dilemma.
What is necessary for enforcing contracts according to Ostrom?
An external actor is needed to enforce the contract.
What did Ostrom observe in her fieldwork regarding common resources?
She observed many cases of successful use and maintenance of common resources with agreements.
