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Game Theory Exercise and Solution

This document contains the solution to a problem set regarding voting and candidates' positions. It includes: 1) Partitioning voters into three groups based on their ideal points relative to the candidates' positions. 2) Equations to calculate the expected number of votes and utility for each candidate based on the number of voters in each group. 3) Recommendations for where Candidate 1 should position themselves depending on their ranking and the other candidate's position, to maximize their utility. 4) The conclusion that both candidates converging on the median voter's ideal point is the equilibrium, as any deviation would result in negative utility.

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555 views

Game Theory Exercise and Solution

This document contains the solution to a problem set regarding voting and candidates' positions. It includes: 1) Partitioning voters into three groups based on their ideal points relative to the candidates' positions. 2) Equations to calculate the expected number of votes and utility for each candidate based on the number of voters in each group. 3) Recommendations for where Candidate 1 should position themselves depending on their ranking and the other candidate's position, to maximize their utility. 4) The conclusion that both candidates converging on the median voter's ideal point is the equilibrium, as any deviation would result in negative utility.

Uploaded by

endu wesen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Problem Set 3 Solution

17.881/882
October 18, 2004
111
1 Morrow 4.11 (pp.107-8)
Note that the ideal point of the median voter is y
n
, and that the mid-point
between x
1
and x
2
is (x
1
+ x
2
)/2
a) Partition the set of ideal points and call n
l
= |{i|y
i
< (x
1
+x
2
)/2}|, n
r
=
|{i|y
i
> (x
1
+ x
2
)/2}|, n
c
= |{i|y
i
= (x
1
+ x
2
)/2}|
Voters at the midpoint vote for candidate 1 with probability 1/2, and for
candidate 2 with probability 1/2.
Let v
j
be the expected number of votes for party j; v
1
= n
l
+
n
c
2
; v
1
= n
r
+
n
c
2
Let u
j
be the utility of party j. Then u
1
= v
1
v
2
= n
l
n
r
; u
2
= u
1
=
n
r
n
l
b) If i < n, candidate 1 should choose x
1
such that x
2
< x
1
< 2y
i+1
x
2
If i n and x
2
> y
i
, candidate 1 should choose x
1
such that 2y
i
x
2
<
x
1
< x
2
If i > n and x
2
= y
i
, candidate 1 should choose x
1
such that 2y
i1
x
2
<
x
1
< x
2
If i = n and x
2
= y
i
, candidate 1 should choose x
1
= x
2
c) Both candidates choose the ideal point of the median voter, in which case
both get utility of 0. If any candidate chooses a position marginally to the left of
the right of the median voter, then that candidate would lose and get negative
utility. So we get convergence at the median.
3

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