Dominant Strategy Equilibrium in the Irrigation Game
Assuming the farmers in the irrigation game are motivated solely by their own monetary payoff, the game has a dominant strategy equilibrium. In this equilibrium, every farmer chooses not to contribute, which results in a payoff of zero for all participants.
0
1
Tags
Social Science
Empirical Science
Science
CORE Econ
Economy
Economics
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.4 Strategic interactions and social dilemmas - The Economy 2.0 Microeconomics @ CORE Econ
Related
Dominant Strategy Equilibrium in the Irrigation Game
Strategic Decision in a Community Project
Imagine a scenario with four farmers who share access to a water source. They are considering a project to improve irrigation. For each farmer who contributes $10 to the project, the crop yield for every farmer (including those who don't contribute) increases by $8. A farmer's net payoff is the benefit they receive from the total contributions minus their own cost, if any. Consider the decision of one farmer, Kim. To maximize her own personal payoff, what should she do?
Four farmers are deciding whether to contribute to a shared irrigation project. A contribution costs an individual farmer $10. For each farmer who contributes, the crop yield for every one of the four farmers increases by $8. From the perspective of a single farmer aiming to maximize their personal net payoff, which statement best explains why not contributing is the dominant strategy?
Evaluating a Cooperative Strategy
Analyzing Payoffs in a Shared Resource Game
Consider a scenario with four farmers, including one named Kim, deciding whether to contribute to a shared irrigation project. A contribution costs an individual $10. For each farmer who contributes, the crop yield for every farmer increases by $8. A farmer's net payoff is the benefit they receive from the total contributions minus their own cost, if any. Match each scenario, based on the number of other farmers contributing, to the correct description of Kim's potential payoffs.
Consider a scenario with four farmers deciding whether to contribute to a shared irrigation project. A contribution costs an individual $10, and for each farmer who contributes, the crop yield for every farmer increases by $8. If one of these farmers knew for certain that none of the other three would contribute, their best choice to maximize their personal payoff would be to contribute, because receiving an $8 benefit is better than receiving nothing.
Consider a scenario with four farmers deciding whether to contribute to a shared irrigation project. A contribution costs an individual $10, and for each contribution made by any farmer, the crop yield for every farmer increases by $8. By analyzing the potential outcomes, it can be determined that an individual farmer's net payoff is always exactly $____ higher if they choose not to contribute compared to if they do, regardless of how many other farmers contribute.
Evaluating a Policy Intervention in a Public Goods Game
Four farmers are deciding whether to contribute to a shared irrigation project. A contribution costs an individual $10. For each farmer who contributes, the crop yield for every one of the four farmers increases by $8. One farmer makes the following argument: "If all four of us contribute, we each get a benefit of $32 (4 * $8). Since this $32 benefit is much greater than my $10 cost, it is clearly in my personal best interest to contribute."
Which of the following statements best exposes the flaw in this farmer's reasoning from the perspective of maximizing their own individual payoff?
Alex is one of four students working on a group project. Each student must decide independently whether to 'Contribute' significant effort or 'Not Contribute'. Alex's final score on the project depends on her choice and the number of other students who choose to contribute. The table below shows Alex's potential scores.
Number of OTHER students who contribute Alex's Score if SHE CONTRIBUTES Alex's Score if SHE DOES NOT CONTRIBUTE 0 -2 0 1 6 8 2 14 16 3 22 24 Based on an analysis of these potential outcomes, what is the most logical conclusion about Alex's best strategy if her sole goal is to maximize her own score?
Identifying a Dominant Strategy
Strategic Business Decision Analysis
Consider two competing companies, Firm A and Firm B, deciding whether to set a 'High' or 'Low' advertising budget for the next quarter. The table below shows the potential profits (in thousands of dollars) for Firm A based on the decisions made by both companies.
Firm B chooses 'High' Firm B chooses 'Low' Firm A chooses 'High' 100 150 Firm A chooses 'Low' 120 160 Statement: Based on this profit matrix, choosing a 'High' advertising budget is Firm A's dominant strategy.
For each of the following three players in different scenarios, analyze their potential payoffs to determine their best course of action. Match each player's scenario ('Term') with the correct strategic description ('Definition').
The Paradox of Self-Interest in Collective Action
In a strategic interaction, if a player has one strategy that results in a better outcome for them than any of their other available strategies, regardless of the actions chosen by the other players, this is known as a ________ strategy.
You are analyzing the strategic choices for Player 1 in a game. The table below shows Player 1's potential payoffs, which depend on their own action ('Action A' or 'Action B') and the action of Player 2. Arrange the following steps in the correct logical order to determine if Player 1 has a dominant strategy.
Player 2 chooses 'Strategy X' Player 2 chooses 'Strategy Y' Player 1 chooses 'Action A' 15 30 Player 1 chooses 'Action B' 10 25 Public Park Funding Decision
An individual is part of a four-person group where each member must decide whether to 'Contribute' to a public good. The table below shows the individual's payoffs based on their choice and the number of other members who contribute. Currently, 'Not Contribute' is their dominant strategy.
Number of OTHER members who contribute Payoff if THEY CONTRIBUTE Payoff if THEY DO NOT CONTRIBUTE 0 -2 0 1 6 8 2 14 16 3 22 24 These payoffs are calculated from a personal cost of 10 for contributing and a personal benefit of 8 from each contribution (including their own). Which of the following changes would make 'Contribute' a better choice than 'Not Contribute' in at least one scenario, thus eliminating the dominant strategy?
Learn After
Four farmers must independently decide whether to contribute to a shared irrigation project. Contributing costs an individual farmer $10. For each farmer who contributes, every farmer in the group (including those who do not contribute) receives a benefit of $8. Each farmer's sole motivation is to maximize their own individual monetary payoff. What is the most likely outcome of this situation?
Strategic Decision in a Shared Resource Game
Explaining the Logic of a Suboptimal Equilibrium
Consider a scenario where a group of individuals can each contribute to a public project. Contributing has a personal cost, but generates a benefit that is shared equally among all members of the group, regardless of who contributes. If every individual acts solely to maximize their own personal outcome, the resulting equilibrium will be the one that provides the greatest total benefit to the group as a whole.
Evaluating Collective Action Problems
In the context of a game where self-interested individuals decide whether to contribute to a shared project, match each concept to its correct description.
Consider a scenario with a group of farmers who must each decide whether to contribute to a shared irrigation project. The personal cost to contribute is $10. For each farmer who contributes, every farmer in the group receives a benefit of $8. Given that each farmer acts solely to maximize their own individual payoff, the dominant strategy is not to contribute, resulting in a payoff of $0 for everyone. Which of the following changes to the rules would be sufficient to make 'contribute' the new dominant strategy for each farmer?
A group of four individuals are playing a game. Each can choose to 'cooperate' or 'defect'. Cooperating costs the individual $5, but adds $4 to the payoff of every player in the group (including themselves). Defecting has no cost and adds nothing to anyone's payoff. If all four players act solely to maximize their own individual payoff and follow their dominant strategy, the final payoff for each player will be ______.
A farmer is part of a group where each member must independently decide whether to contribute to a shared resource. Contributing has a personal cost, but each contribution provides a benefit to every member of the group (including those who do not contribute). The farmer's sole motivation is to maximize their own individual outcome. Arrange the following steps in the logical order a self-interested farmer would follow to determine their best strategy.
Analyzing a Farmer's Reasoning
Observed Cooperation in Real-World Social Dilemmas