In experiments in which participants voluntarily contribute to the provision of a public good, we often find a reduction in contributions in successive rounds of the experiment. We can explain this as A) Evidence of participants reaching satiation and not wanting such high levels of the public good. B) Evidence of participants reducing cooperation to punish free riding. C) Evidence of participants working out the Nash equilibrium outcome of the voluntary contribution game. D) Evidence of participants learning how to play the game more effectively.

In experiments in which participants voluntarily contribute to the provision of a public good, we often find a reduction in contributions in successive rounds of the experiment. We can explain this as A) Evidence of participants reaching satiation and not wanting such high levels of the public good. B) Evidence of participants reducing cooperation to punish free riding. C) Evidence of participants working out the Nash equilibrium outcome of the voluntary contribution game. D) Evidence of participants learning how to play the game more effectively.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.7P

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In experiments in which participants voluntarily contribute to the provision of a public good, we often find a reduction in contributions in successive rounds of the experiment. We can explain this as Group of answer choices Evidence of participants reaching satiation and not wanting such high levels of the public good. Evidence of participants working out the Nash equilibrium outcome of the voluntary contribution game. Evidence of participants reducing cooperation to punish free riding. Evidence of participants learning how to play the game more effectively.
Within a voluntary contribution game, the Nash equilibrium level of contribution is zero, but in experiments, it is often possible to sustain positive levels of contribution for a long period. How might we best explain this? A) Participants are altruistic, and so value the payoff which other participants receive, benefiting (indirectly) from making a contribution. B) Participants believe that if they make a contribution, then other participants will be more likely to make a contribution. C) Participants in experiments believe that they have to make contributions in order to receive any payoff from their participation. D) Participants have experience of working in situations in which cooperation can be sustained for mutual benefit and so have internalised a social norm of cooperation
(a) Consider the following games which are commonly used in laboratory exper- iments on social preferences. For each: describe the game, explain how the game would be played by selfish players and summarise the main findings from the experimental evidence. i. Dictator game ii. Ultimatum bargaining game iii. Trust game (b) Carefully comment on the figure below, which shows the percentage of third parties who punish in the dictator game and is taken from Fehr and Fischbacher (2004), "Third party punishment and social norms", Evolution and Human Behavior 25(2).. Percentage of punishers E. Fehr, U. Fischbacher/ Evolution and Human Behavior 25 (2004) 63-87 100 90 80 70 60 50 40 30 20 10 0 A percentage of third parties who punish --percentage of recipients who belief that third parties punish 0 10 20 30 Dictator's transfer to recipient Fig. 1. Percentage of third parties who punished in the dictator game. 40 50 (c) Explain why anonymity of the subjects is an important feature of public good…
(a) Consider the following games which are commonly used in laboratory exper- iments on social preferences. For each: describe the game, explain how the game would be played by selfish players and summarise the main findings from the experimental evidence. i. Dictator game ii. Ultimatum bargaining game iii. Trust game (b) Carefully comment on the figure below, which shows the percentage of third parties who punish in the dictator game and is taken from Fehr and Fischbacher (2004), "Third party punishment and social norms", Evolution and Human Behavior 25(2). [10 marks] Percentage of punishers E. Fehr, U. Fischbacher/ Evolution and Human Behavior 25 (2004) 63-87 100 90 80 70 60 50 40 30 20 10 0 A percentage of third parties who punish --percentage of recipients who belief that third parties punish 0 10 20 30 Dictator's transfer to recipient Fig. 1. Percentage of third parties who punished in the dictator game. 40 50 (c) Explain why anonymity of the subjects is an important feature of…
The ultimatum game is a game in economic experiments. The first player (the proposer) receives a sum of money and proposes a fair proposal (F - 5;5) or unfair proposal (U - 8;2). The second player (the responder) chooses to either accept (A) or reject (R) this proposal. If the second player accepts, the money is split according to the proposal. If the second player rejects, neither player receives any money. 1 A 5:5 2 F R 0:0 U A 8:2 2 1. Find the subgame perfect Nash Equilibrium using backward induction. R 0;0
One way of which has been proposed for sustaining high levels of contribution in voluntary contribution games is to allow participants to pay to punish free-riders. We believe that this is effective when A) Participants are not altruistic and so are willing to punish free riding. B) All of the other three statements are partial explanations, with participants being willing to punish free riding, potential free riders realising that adherence to the social norm is now the payoff maximising strategy, and the Nash equilibrium becoming adherence to the social norm. C) Participants who are tempted to reduce contributions anticipate future punishment and so conclude that they are better off maintaining contributions. D) Giving participants the ability to punish violation of a social norm means that adherence to the social norm becomes the Nash equilibrium of the game.
Let us see the example of Juan and María given but modify their preferences. It is still the case that they are competitive and are deciding whether to show up at their mom’s house at 8:00 A.M., 9:00 A.M., 10:00 A.M., or 11:00 A.M. But now they don’t mind waking up early. Assume that the payoff is 1 if he or she shows up before the other sibling, it is 0 if he or she shows up after the other sibling, and it is 1 if they show up at the same time. The time of the morning does not matter. Find all Nash equilibria.
Two friends are deciding where to go for dinner. There are three choices, which we label A, B, and C. Max prefers A to B to C. Sally prefers B to A to C. To decide which restaurant to go to, the friends adopt the following procedure: First, Max eliminates one of three choices. Then, Sally decides among the two remaining choices. Thus, Max has three strategies (eliminate A, eliminate B, and eliminate C). For each of those strategies, Sally has two choices (choose among the two remaining). a.Write down the extensive form (game tree) to represent this game. b.If Max acts non-strategically, and makes a decision in the first period to eliminate his least desirable choice, what will the final decision be? c.What is the subgame-perfect equilibrium of the above game? d. Does your answer in b. differ from your answer in c.? Explain why or why not. Only typed Answer
Outlining examples, provide a short (economic) definition of each of these terms, which have been suggested as having a role to play in resolving social dilemmas.a) Altruismb) Reciprocityc) Punishmentsd) Social norms Answer all, please.
Prisoners' Dilemma: Which one of the following description is CORRECT according to the Normal Form? 1.) Prisoner 1 would choose defect (D) no matter which choice Prisoner 2 makes. 2.) Prisoner 2 would choose cooperate (C) no matter which choice Prisoner 1 makes. 3.) Eventually, both Prisoners would choose cooperate (C) so that they can be better off. 4.) Eventually one of Prisoners would choose cooperate (C) and the other would choose defect (D).
In a standard economic model, we generally assume the individual only cares about their own payoff. So, for example, utility of individual i is given by u = pi, where pi is the individual’s payoff. Suppose the individual is playing a dictator game with another partner j. How would you modify the utility function to explain the non-zero allocations to the partner that are typically observed?
The simultaneous-move game G is player twice, with the outcome of the first stage observed before the second stage begins. There is no discounting. Find out the subgame- perfect outcome. With pareto improvement in your mind, can you revisit the subgame- perfect outcome you just found. Is there an improved subgame-perfect outcome? Explain how you get it. L2 M2 R2 P2 Q2 L1 1,1 5,0 0,0 0,0 0,0 M1 0,5 4,4 0,0 0,0 0,0 R1 0,0 0,0 3,3 0,0 0,0 P1 0,0 0,0 0,0 4, 1/2 0,0 Q1 0,0 0,0 00 0,0 0,0 12,4