Question: A rumrunner attempts to smuggle rum into a country having two ports. Each day, the coast guard is able to patrol only one of the

A rumrunner attempts to smuggle rum into a country having two ports. Each day, the coast guard is able to patrol only one of the ports. If the rumrunner enters via an unpatrolled port, he will be able to sell his rum for a profit of $7000. If he enters the first port and it is patrolled that day, he is certain to be caught and will have his rum (worth $1000) confiscated and be fined $1000. If he enters the second port (which is big and crowded) and it is patrolled that day, he will have time to jettison his cargo and thereby escape a fine.
(a) What is the payoff matrix for the game? Denote the two ports by I and II, and write the entries of the matrix in thousands of dollars.
(b) What is the optimal strategy for the rumrunner?
(c) What is the optimal strategy for the coast guard?
(d) How profitable is rum running? That is, what is the value of the game?

Step by Step Solution

★★★★★

3.45 Rating (171 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a The payoff matrix with entries in thousands of dollars is Add 3 to ea... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1385-M-S-L-P(2989).docx

120 KBs Word File

Students Have Also Explored These Related Statistics Questions!

A computer system uses passwords consisting of the lowercase letters (az) and the integers (09). There are 10,000 users with unique passwords. A hacker randomly selects (with replacement) passwords...

A collection of field goal kickers are divided into groups 1 and 2. Group i has 3i kickers. On any kick, a kicker from group i will kick a field goal with probability + independent of the outcome of...

Over three decades ago, four business people who had experience in retailing natural foods through food stores believed that there was a demand for a supermarket for natural foods. As a result, in...

9.3 finite math homework A rumrunner can smuggle rum through one of two ports and the coast guard can patrol only one of them. If a port is unpatrolled, he can sell his rum for $6000. If he enters...

finite math homework A rumrunner can smuggle rum through one of two ports and the coast guard can patrol only one of them. If a port is unpatrolled, he can sell his rum for $5000. If he enters the...

A rumrunner can smuggle rum through one of two ports and the coast guard can patrol only one of them. If a port is unpatrolled, he can sell his rum for $ 7 0 0 0 . If he enters the first port and...

Select the correct sentence or paragraph order to create a document that is well - organized, clear, and coherent. If no correction is necessary, choose " no change to the sentence order is...

external and internal analysis for this case study? Case Study: SNC-LAVALIN GROUP INC. by Steven L. MicShane, Univenity of Neveastle (Australia) Bribery of forcign poblic officials, conspiracy to...

location and might be unsafe. Click for more details. Enable Editing Assignment Case Study 1 (Marks 21). Case Study SNC-LAVALIN GROUP INC Bribery of foreign public officials, conspiracy to commit...

Bribery of foreign public officials, conspiracy to commit fraud and forgery, money laundering, possessing property obtained by crime, and attempts to secretly smuggle the son of a former dictator...

Read the case and write a paper about it: INFORMATION REPORTS, INC. Jane Haynes was recently promoted to sales manager for Information Reports, Inc. Information Reports gathers huge business data...

Explain how you would use each of the three data gathering techniques: interviews, questionnaire, and observation in your data gathering program. Explain how your plans take account of triangulation....

in a tax - free reorganization, gain or loss is never recognized by either the acquiring corporation or the target corporation

Which of the following cannot explain the eventual rise in average variable cost as output increases? a. Poorer quality of labor employed b. Higher wage rates paid c. Greater labor specialization d....

Use Formula 10 to evaluate each logarithm correct to six decimal places. (a) log12 10 (b) log2 8.4

Use Formula 10 to graph the given functions on a common screen. How are these graphs related?

Suppose that the graph y = log 2x of is drawn on a coordinate grid where the unit of measurement is an inch. How many miles to the right of the origin do we have to move before the height of the...

Suppose the interest rate is 4 . 3 % . a . Having $ 2 5 0 today is equivalent to having what amount in one year? b . Having $ 2 5 0 in one year is equivalent to having what amount today? c . Which...

Ollivette is a relatively new firm and is in a period of rapid development. The company plans on retaining all of its earnings for the next four years. Five years from now, the company projects...

Granville Company issued a $6,300,000 in 8%, 10-year bonds when the market rate of interest is 10%. Interest is paid semiannually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of...