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

question 75

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 professional basketball. Each school can illegally pay top players to enroll and thus increase the winning percentage of the team, or each program can follow the rules and lose the top players to the professional ranks. The table shows the payoff matrix of winning percentages that each school would receive from its recruiting decision, given the recruiting decision of its rival. Winning percentages in each cell of the payoff matrix are given as (HSU, BSU).
A) What is the noncooperative Nash equilibrium?
B) Suppose 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 not. If one school breaks the agreement and pays players, the other school will do the same 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?

Definitions:

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A chronic autoimmune disorder that primarily affects joints, leading to inflammation, pain, stiffness, and potentially joint deformity over time.

Bone Resorption

The process by which bone tissue is broken down by the body, involving the release of minerals from the bone into the bloodstream.

Osteoporosis

A condition characterized by weakened bones that are more prone to fracture, often occurring with age or hormonal changes.

Metabolic Disease

A broad category of diseases that affect the metabolism, including disorders of carbohydrate metabolism, lipid metabolism, and more, often genetic in nature.