Deliverable 05 Worksheet 1 Market Research Has Determ 857343

Deliverable 05 Worksheet1 Market Research Has Determined The Follow

Deliverable 05 – Worksheet 1. Market research has determined the following changes in the polls based on the different combinations of choices for the two candidates on the tax bill in the upcoming debate: Incumbent Challenger Stay Break Stay (0, , 0) Break (1, , 3) Use this payoff matrix to determine if there are dominant strategies for either player. Find any Nash equilibrium points. Show all of your work. Enter your step-by-step answer and explanations here.

Use the payoff matrix from number 1 to determine the optimum strategy for your client (the challenger). Show all of your work. Enter your step-by-step answer and explanations here.

Use the payoff matrix from number 1 to determine the optimum strategy for the incumbent. Show all of your work. Enter your step-by-step answer and explanations here.

Knowing that flip-flopping on an issue is worse than taking a stand on either side, you must recommend a single strategy to the client to take in the upcoming debate. Take into account the predictability of the incumbent’s strategy and assume rationality by both players. Enter your step-by-step answer and explanations here.

Working in parallel your co-worker finds that there is a 60% chance that the incumbent will choose to stay within party lines. Does this agree with your findings? If not, identify the error made by your co-worker. Enter your step-by-step answer and explanations here.

Paper For Above instruction

The provided assignment revolves around analyzing a strategic interaction between two political candidates—an incumbent and a challenger—in the context of a debate over a tax bill. The core task involves applying game theory, specifically using payoff matrices, to determine optimal strategies, dominant strategies, Nash equilibria, and implications of probabilistic behavior assumptions.

In the first phase, students are asked to analyze the payoff matrix to identify whether either player has dominant strategies and to establish any Nash equilibrium points. Dominant strategies in game theory refer to strategies that are optimal regardless of the opponent’s actions, while Nash equilibria are strategy combinations where no player can benefit by unilaterally changing their strategy, assuming the strategies of others remain unchanged (Fudenberg & Tirole, 1991). By examining the payoff matrix with the specified outcomes, students can determine how each candidate’s incentives shape their strategic choices.

Following this, the task shifts to analyzing the optimal strategies for each candidate based on the given payoff matrix. For the challenger, this involves calculating expected payoffs and identifying the strategy that maximizes their utility considering the responses of the incumbent. The same approach applies to the incumbent, with emphasis on selecting strategies that maximize their payoffs under the other’s likely choices (Osborne & Rubinstein, 1994). This step encapsulates the strategic decision-making process under uncertainty.

Furthermore, the students must recommend a unified strategy for the challenger that accounts for the risk of flip-flopping, emphasizing the importance of commitment and clarity in strategic positioning. This involves deriving the most stable or predictable strategy, assuming rationality and the strategic behavior of the opponent (Myerson, 1991). The concept of commitment is vital here, as flip-flopping can diminish credibility and voter trust, thereby negatively impacting electoral outcomes.

The last analytical component involves examining probabilistic predictions made by a co-worker, who estimates a 60% chance that the incumbent will remain within party lines. Students are required to compare this subjective probability with their strategic analysis, detect potential discrepancies, and identify possible errors in assumptions or interpretations. For instance, the co-worker’s assessment might overlook strategic considerations or misinterpret the payoff structure, leading to inaccurate predictions (Kreps, 1990).

Overall, this assignment integrates game-theoretic reasoning with political strategy to illustrate how rational decision-making and probabilistic forecasts influence strategic choices in electoral contexts. Critical thinking and rigorous analysis are necessary to draw meaningful conclusions about optimal strategies and strategic stability in competitive political environments.

References

• Fudenberg, D., & Tirole, J. (1991). Game Theory. MIT Press.
• Kreps, D. M. (1990). A Course in Microeconomic Theory. Princeton University Press.
• Myerson, R. B. (1991). Game Theory: Analysis of Conflict. Harvard University Press.
• Osborne, M. J., & Rubinstein, A. (1994). A Course in Game Theory. MIT Press.