(See Problem 2

question 20

Multiple Choice

(See Problem 2.) Arthur and Bertha are asked by their boss to vote on a company policy. Each of them will be allowed to vote for one of three possible policies, A, B, and C. Arthur likes A best, B second best, and C least. Bertha likes B best, A second best, and C least. The money value to Arthur of outcome C is $0, outcome B is $1, and outcome A is $4. The money value to Bertha of outcome C is $0, outcome B is $4, and outcome A is $1. The boss likes outcome C best, but if Arthur and Bertha both vote for one of the other outcomes, he will pick the outcome they voted for. If Arthur and Bertha vote for different outcomes, the boss will pick C. Arthur and Bertha know this is the case. They are not allowed to communicate with each other, and each decides to use a mixed strategy in which each randomizes between voting for A or for B. What is the mixed strategy equilibrium for Arthur and Bertha in this game?

• A) Arthur votes for A with probabilityand for B with probability. Bertha votes for A with probabilityand for B with probability.
• B) Arthur and Bertha each votes for A with probabilityand for B with probability.
• C) Arthur votes for A with probabilityand for B with probability. Bertha votes for A with probabilityand for B with probability
• D) Arthur votes for A with probabilityand for B with probability. Bertha votes for A with probabilityand for B with probability..
• E) Arthur votes for A and Bertha votes for B.

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Definitions:

Information Processing

The methods by which individuals or systems gather, store, process, and disseminate information.

Bounded Rationality

A concept that individuals make decisions based on the limited information available to them, restricting them from making 'perfect' choices.

Implicit Favorites

The subconscious preference for certain individuals over others, often influencing decision-making and behavior unconsciously.

Decision Structure

The organizational framework that outlines how decisions are made, who makes them, and the processes used to reach conclusions.