Week 10 - Strategic moves

Question 1

What is the chicken game?

Answer 1

Your are driving on a narrow mountain road and see another car heading towards you. Do you swerve or keep driving?

Question 2

What are the 2 NE in the chicken game?

Answer 2

Swerve, keeping driving
Keep driving, swerve

Question 3

What is an unconditional strategic move?

Answer 3

Commitment to play a move which is not dominant. It is unconditional since it doesn’t depend on what others do

Question 4

Give examples of conditional strategic moves (2)

Answer 4

Threats and promises. These are conditional moves because you specify how you would respond to a certain move of the other player

Question 5

Describe commitment in the context of the chicken game

Answer 5

Create a pregame in which you would commit to drive straight, changing the game from simultaneous to sequential.

Question 6

What are the two types of commitment and give an example.

Answer 6

Restricting own freedom e.g. throw steering wheel out the window so you have to drive straight
Change own payoff e..g so that drive straight becomes dominant. Give money to a 3rd party, which would not be returned unless you choose D.

Question 7

What do you have to make sure when making a commitment in a pre game

Answer 7

The other players know about your commitment

Question 8

What do threats and promises do?

Answer 8

Require players to choose an action that is not their best response