In a little town with 200 inhabitants there are two possible Internet Service Providers. One of...

  

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In a little town with 200 inhabitants there are two possible Internet Service Providers. One of them is called Premium, the other one is called Economic. People who hire the Premium service get an enjoyment of 100. People who hire the Economic service get a payoff that depends on the total number of inhabitants within the town that have hired the Economic service. To be precise, if the number of people who've hired Economic is represented by the letter N, then the enjoyment that each of those N people get is 450 -2. N. TASKS/QUESTIONS 3.1 Consider the strategy combination in which all 200 of the town's inhabitants have hired the Premium service. Answer the following questions: 3.1 a) What would be the payoff of a representative player if this combination is enacted? 3.1 b) What would be the payoff of a representative player if she switched/deviated to Economic while everyone else's choice stays fixed at Premium? 3.1 c) Is this strategy combination a Nash Equilibrium? Why/Why not? 3.1 d) Find a strategy combination that Pareto Dominates the combination described here. 3.2 Consider the strategy combination in which all 200 of the town's inhabitants have hired the Economic service. Answer the following questions: 3.2 a) What would be the payoff of a representative player if this combination is enacted? 3.2 b) What would be the payoff of a representative player if she switched/deviated to Premium while everyone else's choice stays fixed at Economic? 3.2 c) Is this strategy combination a Nash Equilibrium? Why/Why not? 3.2 d) Find a strategy combination that Pareto Dominates the combination described here. 3.3 Consider a strategy combination in which 200-Y of the town's inhabitants have hired the Premium service, while y have hired the Economic service. Answer the following questions: 3.3 a) What is the no-defection condition of the inhabitants that are hypothetically choosing Premium? 3.3 b) What is the no-defection condition of the inhabitants that are hypothetically choosing Economic? 3.3 c) Find two different values of Y for which the strategy combination described here would be a Nash Equilibrium. In a little town with 200 inhabitants there are two possible Internet Service Providers. One of them is called Premium, the other one is called Economic. People who hire the Premium service get an enjoyment of 100. People who hire the Economic service get a payoff that depends on the total number of inhabitants within the town that have hired the Economic service. To be precise, if the number of people who've hired Economic is represented by the letter N, then the enjoyment that each of those N people get is 450 -2. N. TASKS/QUESTIONS 3.1 Consider the strategy combination in which all 200 of the town's inhabitants have hired the Premium service. Answer the following questions: 3.1 a) What would be the payoff of a representative player if this combination is enacted? 3.1 b) What would be the payoff of a representative player if she switched/deviated to Economic while everyone else's choice stays fixed at Premium? 3.1 c) Is this strategy combination a Nash Equilibrium? Why/Why not? 3.1 d) Find a strategy combination that Pareto Dominates the combination described here. 3.2 Consider the strategy combination in which all 200 of the town's inhabitants have hired the Economic service. Answer the following questions: 3.2 a) What would be the payoff of a representative player if this combination is enacted? 3.2 b) What would be the payoff of a representative player if she switched/deviated to Premium while everyone else's choice stays fixed at Economic? 3.2 c) Is this strategy combination a Nash Equilibrium? Why/Why not? 3.2 d) Find a strategy combination that Pareto Dominates the combination described here. 3.3 Consider a strategy combination in which 200-Y of the town's inhabitants have hired the Premium service, while y have hired the Economic service. Answer the following questions: 3.3 a) What is the no-defection condition of the inhabitants that are hypothetically choosing Premium? 3.3 b) What is the no-defection condition of the inhabitants that are hypothetically choosing Economic? 3.3 c) Find two different values of Y for which the strategy combination described here would be a Nash Equilibrium.

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31 a The payoff of a representative player would be 100 if this combination is enacted 31 b The payo... View the full answer