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Game theory : Three city politicians vote on whether to allow themselves a salary increase of $2,500 per year.
Game theory :
Three city politicians vote on whether to allow themselves a salary increase of $2,500
per year. Voters would dislike it if the politicians vote for a salary increase, and a
politician who votes for one would face public scorn. Assume that public scorn costs
a politician $1,000 per year. Suppose that the politicians vote at the same time, and
cannot observe each others' voting. Which of the following is NOT a Nash equilibrium
of this game?
(A)
All three legislators vote against the pay raise.
(B)
Legislator 1 and 2 vote for the pay raise, while Legislator 3 votes against it.
(C)
Legislator 3 and 2 vote for the pay raise, while Legislator 1 votes against it.
(D)
All three vote for the pay raise