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Practice Problems

IIG Problems to Solve

1. Define Endogenous 2. Define Exogenous 3. Define Nash equilibrium 4. Define Necessary Condition 5. Define Sufficient Condition 6. All subgame perfect Nash equilibria are Nash equilibria but not all Nash equilibria are subgame perfect. Is knowing that x is a subgame perfect equilibrium of game y necessary to say x is a Nash equilibrium of game y? Is it sufficient? Is x probabilistically a Nash equilibrium of game y? 7. What are Fearons rationalist conditions that make war possible? 8. Why is war said to be ex post inefficient?

Write down at least 2 preference orderings that are not possible in the Realpolitik version of the IIG but are possible in the domestic version. Why cant either form of capitulation or a war started by B be a complete and perfect information equilibrium outcome of the domestic IIG? What must be true for a player in the domestic IIG in order for that player to prefer to capitulate to the other player rather than compel the other player to capitulate?

Write down a preference ordering that is consistent with the domestic IIG assumptions and for which the equilibrium outcome is:
1. 2. 3. 4. 5. Acquiescence by A Acquiescence by B Negotiation Status Quo War started by A

Find the Nash equilibria for the following game: Player B


Left Right

Up
Down

4, 1
1,3

2,0
3,6

Let the utility for winning a war = 1 for A and for B. Let the utility for losing a war = 0 for A and for B Let L be a proposed settlement of a land dispute in which A prefers to get all of L and B prefers to keep all of L so that Bs utility for L = 1-L (i.e., giving less away is better than giving more away). Let p = the probability A can defeat B (so 1-p is Bs probability of victory) How big can L be and get A and B to compromise on a land transfer of L percent of the land in dispute? What might a deal look like that would fail to avoid war.