Borins presents three ideal types of innovation in the public sector. Describe the ideal type you think is found most in the public sector. Why do you think these three ideal types of innovation are not found more often in the public sector? Discussion Question 1 (150 words)"7 Strategies for Sustained Innovation" article lists different strategies needed to sustain innovation. Discuss the two most difficult strategies to implement in the public sector. What makes these strategies so difficult to implement? (150 words) Discussion Question 2

Topic: Game theory In a finitely repeated prisoner's dilemma what is the optimal strategy for each player? PROFESSOR'S GUIDANCE FOR THIS WEEK'S LE: Prisoners' dilemma is one of the most celebrated topics in whole game theory. In that two agents engage in a game with payoffs that has a Nash equilibrium that shuns cooperation. Here we want to investigate the possible outcome if these agents play with each other again and again. 1. Please make sure that you read the relevant chapter from the textbook 2. Watch the YouTube videos for this week and additional course material provide POST In a game, the players are individuals who make decisions. For example, in an oligopolistic market consisting of two firms, each of which must make a pricing decision, the firms (or, more precisely, the firms’ managers) are the players (Michael & Jeff, 2016). The decisions planned by the players are called strategies. The pay-offs to the players are the profits or losses that result from the strategies. Due to interdependence, the pay-off to a player depends not only on that player’s strategy but also on the strategies employed by other players. I have a real-life example of this. I contemplated taking someone to HR at work, and I knew that the other person had been talking about taking me to HR. I was too busy and scared, so I didn't take her to HR, and she took me to HR. I got screwed, even though I did not do anything remotely wrong as she had done (sexual harassment, telling me I need to get laid, bullying, etc.). So I should have, according to game theory dominant strategy, taken her to HR. That way, it would have canceled out. I got the book thrown at me. Now, here is the optimal strategy for each player: 1. Everyone in the game will do what is best for themselves. 2. You have to anticipate what the other player will do to make a counteractive move. 3. Each player's actions will be influenced by how the other player moves or acts. e.g., If I'm in the oil business: 1. My competitors will always try to maximize or increase their profit by increasing volume when prices are high or cut prices when there's an oversupply. 2. If I decide to keep my price of oil high and sell at that high price. The competitor will undercut my price to steal away profits (Biglaiser & DeGraba, 2001). 3. So, in response to my competitor, I will match their oil price. If I do match the price cut off oil, "I'll be in equilibrium" if I lower my price more than my competitor, I will lose more money than if I had just matched the price cut. References Biglaiser, Gary and DeGraba, Patrick, (2001). “Downstream Integration by a Bottleneck Input Supplier Whose Regulated Wholesale Prices Are above Costs.” RAND Journal of Economics 32(2), pp. 302–15. Michael R. Baye & Jeff Prince, (2016). Managerial Economics & Business Strategy, 9th ed. McGraw-Hill Irwin POST 2 Prisoners' dilemma is a paradox situation in decision analysis where two persons guided by their self-interest miss it at producing an optimal outcome. As a result, the said parties choose to protect themselves at the expense of the other participant (Baye & Prince, 2016). This paradoxical decision-making analysis is coined under the theories described as a theoretical framework to understand social situations among competing parties to derive optimal decision-making among independent and competing parties in a strategic setting. The dominant strategy stands as the optimal strategy for each player in a finitely repeated prisoner's dilemma. In this case, the actions taken by one of the parties do not affect the action taken by the other party (Baye & Prince, 2016). To explain this position further, the two prisoners have different options to pursue when being interrogated. First, the prisoners can both keep quiet and fail to give each other up. If this happens, both the prisoners will get a light sentence, say 1-year jail term. Second, each prisoner has a choice to testify. If one prisoner testifies and the other does not, the prisoner who testifies walks out free or gets an even lighter sentence, and the other gets a higher sentence (The Economic Detective, 2013). Both parties may tell each other that they swear not to testify. However, the two parties only care about their self-interest. In this light, the dominant strategy for all the prisoners is to testify and either walk free without serving a sentence or everyone gets a slight sentence. The dominant strategy works best even in the business environment. For instance, the oil company or an airline has to mind the prices in the market to remain competitive in the market (The Economic Detective, 2013). Their best shot at controlling a significant market share is to reduce the price to a reasonable amount without colluding with the other businesses that offer the same product or services. Their competitors would follow suit until they level terms. Although the two companies acted on their own, their actions create a healthy atmosphere for competition.