Question:

Consider the HotellingDowns electoral competition model with four players, each chooses a policy position in the interval [0.1] to maximize their probability of winning the election. Now assume that the voters' ideal policies are distributed uniformly over [0, 1]. [This means that, for all 0 g a g b g l, the proportion of the voters with ideal policies between a and b is equal to b :1. Thus, the median voter now has ideal policy 5) l 1 E E 4=414=4 1 J , i.e., players 1 and 2 choose while players (1) Now consider the action prole ( 4 , 3 and 4 choose policy platform 3. Is this action prole a Nash equilibrium? Explain your answer. (5 pts)