Deliverable 05 – Worksheet
Deliverable 05 – Worksheet
- Market research has determined the following changes in the polls based on the different combinations of choices for the two candidates on the tax bill in the upcoming debate:
| Incumbent | |||
| Challenger | Stay | Break | |
| Stay | (0, 4) | (3, 0) | |
| Break | (1, 2) | (2, 3) |
Use this payoff matrix to determine if there are dominant strategies for either player. Find any Nash equilibrium points. Show all of your work.
- Use the payoff matrix from number 1 to determine the optimum strategy for your client (the challenger). Show all of your work.
- Use the payoff matrix from number 1 to determine the optimum strategy for the incumbent. Show all of your work.
- Knowing that flip-flopping on an issue is worse than taking a stand on either side, you must recommend a single strategy to the client to take in the upcoming debate. Take into account the predictability of the incumbent’s strategy and assume rationality by both players.
- Working in parallel your co-worker finds that there is a 60% chance that the incumbent will choose to stay within party lines. Does this agree with your findings? If not, identify the error made by your co-worker.
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