ECON 3M03 Lecture Notes - Lecture 10: Utility, Externality, Marginal Product
8 Feb 2015
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Some players use pure strategies and some use mixed strategies. In 3-player example: suppose p3 always hunts for something big (uses pure b) This means that only relevant payoff matrix is. Let p = prob that p1 or p2 (independent of one another) hunt big since p3 is hunting b. )b,s,b((prob)b,b,b(2p(prob)b(ev111 s) hunts 2b) hunts 33(prob32p(prob)b(ev1 s) hunts 2b) hunts )b,s,s((prob)b,b,s(2p(prob)s(ev111 s) hunts 2b) hunts p411)p1(5p)s(ev1 )s(ev)b(ev11 2/1*pp413 1,2,3i for3)s(*ev)b(*eviistag hunt with many players. Free riding is not just present in the stag hunt game. Suppose that public goods (such as law and order, national defence) is paid by. Everyone gets benefit from public goods, whether they pay for it or not. This is a situation like that of stag hunt. Since the good is non-excludable whether people pay for it or not with voluntary taxes. The strategy hunt big is like paying taxes voluntarily, Group hunt is like production of public good with the taxes voluntarily paid.
