Econ 359:  Industrial Organization
Spring 2008
 

Problem Set Number 4

due February 18, 2008


The following questions refer to the attached column by David Reaume published in the Anchorage Daily News on Sunday, March 11, 2001.

1. Game structure

a. Who are the players?
b. List the actions (possible moves)
c. Describe the payoffs for each player
d. What is the information structure: perfect? complete? certain? symmetric?
2. Is there a dominant strategy? If so, what is it?

3. Suppose you were the CEO of a firm considering whether to locate in Anchorage, Point McKenzie (Mat-Su Borough), or Nikiski (Kenai Peninsula Borough).

a. Who are the players of this game?
b. List the actions (possible moves)
c. Describe the payoffs for each player
d. What is the information structure: perfect? complete? certain? symmetric?
e. Is there a dominant strategy for the Anchorage government? If so, what is it?
f. Is there a dominant strategy for the CEO? If so, what is it?