Two Large Universities, Humongous State (HSU) and Behemoth State (BSU)

question 159

Essay

Two large universities, Humongous State (HSU) and Behemoth State (BSU), dominate college basketball.Each basketball program aggressively recruits the best athletes to attend the university, but the best athletes can skip college and jump immediately to pro basketball.Each school could choose to illegally pay top players to attend their schools and thus increase the winning percentage of the team, or each program can follow the rules and not pay top athletes to play college basketball, thus losing them to the pro ranks.The table shows the payoff matrix of winning percentages that each school would receive from their recruiting decision, given the recruiting decision of their rival.Winning percentages in each cell of the payoff matrix are given as (HSU, BSU).a) What is the noncooperative Nash equilibrium?
b) Suppose that each school considers the future and devises a tit-for-tat strategy.Neither school
will pay players to play basketball so long as the other does the same.If one school breaks the agreement and pays players, the other school will do the same and continue to do so until the first school stops paying players.If both schools adopt the tit-for-tat strategy, what are the winning percentages every year? Will this be effective at eliminating the illegal practice of paying college athletes to play basketball?

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Definitions:

Exploratory Motives

The drive behind individuals' desire to explore, investigate, and learn about their environment or new ideas.

Job Performance

The degree to which an employee successfully fulfills the tasks, duties, and responsibilities of their job.

Productivity

relates to the efficiency and effectiveness with which inputs are converted into outputs, often measured in terms of output per unit of input in an economic or workplace context.

Incentives

Rewards or stimuli that motivate individuals to perform actions or engage in behaviors.