Game Theory, Health Economics

n__jref
timer Asked: Apr 17th, 2017

Question Description

Box 14-1 on page 288 of FGS describes how game theory helps explain the "medical arms race” among hospitals up to about 20 years ago.

(1) Explain what a "dominant strategy” is in game theory.

(2) Using Box 14-1, replace the "Adopt, Adopt" entry (first row, first column) with 300, 300. Replace the "Do Not Adopt, Do Not Adopt" entry (second row, second column) with 50, 50. Does A have a dominant strategy? Does B? What is the solution to this game?

(3) Why is the medical arms race less a problem today than it once was?

(Tip: In order to determine what strategy a "player” should adopt, the player asks, "If B adopts, then what should I do? If B does NOT adopt, then what should I do?” Both players in the game approach the selection of their strategy in this way.)

User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

This question has not been answered.

Create a free account to get help with this and any other question!

Related Tags

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors