Question: 2 - Two distinct proposal, A and B , are being debated in Ottawa. Parliament likes proposal A , and the Governor General likes proposal
Two distinct proposal, A and B are being debated in Ottawa. Parliament likes proposal A
and the Governor General likes proposal B The proposals are not mutually exclusive; either
or both or neither may become law. Thus, there are four possible outcomes, and they are
ranked by the two sides are as follows, where a larger number represents a
First, Parliament decides whether to pass a bill and whether the bill is to contain A or B or
both. Then, the Governor General decides whether to sign or veto the bill.
a Show this game in the normal form of this game. Find all purestrategy Nash Equilibria
if any
b Draw the extensive form of this game.
c Find the Nash equilibrium. Hint: clearly write strategy profile for each player at the
equilibrium.
d Now suppose the rules of the game are changed in only one respect: the Governor
General is given the extra power of a lineitem veto. Thus, if Parliament passes a bill
containing both A and B the Governor General may choose not only to sign or veto the
bill as a whole, but also to veto just one of the two items. Show the new extensive form
and find the equilibrium.
e Explain intuitively why the difference between the two equilibria arises.
please gives an proper details
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
