Please do all parts and show work, thank you! Consider the used car Lemons game
ID: 1156861 • Letter: P
Question
Please do all parts and show work, thank you!
Consider the used car Lemons game played in class. Suppose there are two kinds of used cars, good and bad. The current owner (seller) values good cars at $10,000 and bad cars at $6,000. She knows if the car is good or bad. The dealer (buyer) values good cars at $12,000 and bad cars at $7,000. The buyer's payoff is his value of the car minus the price paid. The seller's payoff is the price she receives minus her value of the car. Finally, assume the dealer thinks a car is good with probability p and thinks bad cars occur with probability 1-p 2a) What is the type space of this game? 2b) Give an example of an outcome from a separating equilibrium 2c) Give an example of an outcome from a pooling equilibrium 2d) Find the Bayesian Nash equilibrium of this game assuming p-0.5 2e) Find the smallest value of p such that a pooling Bayesian equilibrium exists.Explanation / Answer
In 2001, different news sources uncovered that youngsters were being utilized as slaves or modest work in West African cocoa ranches, where most of the world's cocoa is birthed. Administrators in the U.S. attempted to institute laws to require change, however the most remote they got was a deliberate convention (the Harken-Engel Protocol, to be correct), marked by heads of real chocolate organizations, to request the stop of tyke work "as an issue of desperation."
All things considered, this pretty-please demand was pretty much overlooked, and over ten years after the fact, there are still over a million kids taking a shot at cocoa ranches with minimal more than the torn garments on their backs. Their hands and faces are regularly cut with cleaver scars, proof of the principle apparatus they use to chop down the cocoa from trees in the wake of shimmying up the storage compartment (furthermore used to part open the cocoa unit).
The greater part of the youngsters are additionally required to splash perilous chemicals on the products, where they ingest it into their lungs, and they can't go to class while they work, which is disregarding the International Labor Organization (ILO). The greater part of these kids can't read or think of, they subsist on corn glue and bananas, and obviously, they have never tasted the chocolate they create for our own families.
As indicated by the site Grist, a 2011 Tulane University concentrate found an "anticipated aggregate of 819,921 youngsters in Ivory Coast and 997,357 kids in Ghana dealt with cocoa-related exercises" in 2007-2008.
The ILO calls the cocoa business the most noticeably awful type of youngster work today. What's more, these ranches, for the most part in Ghana and Ivory Coast, exist in view of brands like Hershey, Nestle, Mars, and Cadbury—they all buy cocoa from these homesteads, are all mindful of their practices, and starting today, have done minimal about it.