Economics Chapter 9 2 Pleasure From Goofing Off And Not Working

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pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each

would get from the effort they individually put forth and the grade they jointly receive.

According to the figure shown, Sarah:

62.

This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single

grade. They both will enjoy a higher grade when more effort is put into the project, but they also get

pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each

would get from the effort they individually put forth and the grade they jointly receive.

According to the figure shown:

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63.

This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single

grade. They both will enjoy a higher grade when more effort is put into the project, but they also get

pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each

would get from the effort they individually put forth and the grade they jointly receive.

The outcome of the game in the figure shown will be:

64.

This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single

grade. They both will enjoy a higher grade when more effort is put into the project, but they also get

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pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each

would get from the effort they individually put forth and the grade they jointly receive.

The outcome of the game in the figure shown predicts that Joe will earn utility of:

65.

This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single

grade. They both will enjoy a higher grade when more effort is put into the project, but they also get

pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each

would get from the effort they individually put forth and the grade they jointly receive.

If the players in the figure shown act in their own self-interest, then we know that Sarah will earn utility of:

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66.

This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single

grade. They both will enjoy a higher grade when more effort is put into the project, but they also get

pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each

would get from the effort they individually put forth and the grade they jointly receive.

If Joe and Sarah are faced with the game in the figure shown, we can see that:

67.

This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single

grade. They both will enjoy a higher grade when more effort is put into the project, but they also get

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pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each

would get from the effort they individually put forth and the grade they jointly receive.

Assume that Joe and Sarah, from the figure shown, are also dating, in addition to working together on the

joint school project. Further assume that Joe is madly in love with Sarah, who is an excellent student.

Sarah tells Joe that she will break up with him if he does not put forth high effort on this project. This

future punishment by Sarah is an example of:

68. Games that don’t have a dominant strategy:

69. If there is no single strategy that is best regardless of other players’ behavior:

70.

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This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The

Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high

prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at

such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete

with MiiTunes.

If MiiTunes and The Rock Shop are both in the music business and faced with the choices outlined in the

figure shown, we can predict the outcome will be that:

71.

This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The

Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high

prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at

such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete

with MiiTunes.

If MiiTunes and The Rock Shop are both in the music business and faced with the choices outlined in the

figure, we can predict the outcome will be that:

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72.

This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The

Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high

prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at

such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete

with MiiTunes.

According to the figure, if MiiTunes charges low prices, The Rock Shop should:

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73.

This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The

Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high

prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at

such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete

with MiiTunes.

According to the figure, if The Rock Shop enters the market, MiiTunes should:

74.

This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The

Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high

prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at

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such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete

with MiiTunes.

According to the figure, MiiTunes:

75.

This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The

Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high

prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at

such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete

with MiiTunes.

According to the figure, The Rock Shop:

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76.

This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The

Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high

prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at

such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete

with MiiTunes.

Given the dominant strategy of MiiTunes according to the figure, we can predict that The Rock Shop:

77.

This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The

Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high

prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at

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such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete

with MiiTunes.

The game between music stores in the figure shows us that:

78.

This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The

Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high

prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at

such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete

with MiiTunes.

If the two music stores are faced with the game in the figure, we can see that:

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79. A noncooperative equilibrium is one in which:

80. Games:

81. Games:

82. Games:

83. Games with a noncooperative equilibrium:

84. Games with a negative-negative outcome:

85. Cooperative equilibriums:

86. A Nash equilibrium:

87. When all players in a game choose the best strategy they can, given the choices of all other players, it

is always a:

88. Reaching a Nash equilibrium means that:

89. Reaching a Nash equilibrium means that:

90. Once a Nash equilibrium has been found in a game:

91. A commitment strategy is an agreement in which players agree to:

92. A commitment strategy can:

93. For a commitment strategy to work:

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94. Cooperation in prisoner’s dilemma-type games:

95. Reaching a positive-positive outcome through a commitment strategy:

96. When competing firms have a commitment strategy, it is called:

97. Collusion is a situation where businesses:

98. Collusion:

99. When businesses cooperate and agree to hold prices high, it is called ____________, and when they

reach a noncooperative equilibrium it is called _______________.

100. Collusion:

101. Economists call a game that is played more than once:

102. Strategies and incentives:

103. In repeated games:

104. In repeated games: