Prior to the British agricultural revolution in the 17th century, most agriculture in Britain occurred on common land.
Consider a common pasture where N individuals graze their cows. The pasture can productively support kN cows. If the total number of cows exceeds kN, the pasture becomes degraded supporting fewer cows.
Suppose that each individual currently grazes k cows. We will assume that each individual has two strategies available
The responsible strategy (R): continue grazing k cows.
The irresponsible strategy (I): graze k + 1 cows.
Each cow in the pasture above the kN limit imposes a cost c > 0 to the community in terms of degradation. This cost is shared equally by all individual. Thus, for every cow above kN in the pasture, each individual experiences a cost of c/N .
Each individual also realizes a profit p for each of their cows that graze in the pasture.
Assume À
(a) Let Ti(si, m) denote the payoff to player i when m other players have chosen to graze k +1 cows (m € {0, 1, ...,N 1}). Write out the payoff to player i for each of their own strategy choices, (R and I).
(b) Prove that R is strictly dominated by I.
(c) If every player uses their dominant strategy 1, what is the payoff to each player? How does this compare with the payoff if every player instead plays their dominated strategy, R?
(d) How does this compare with the outcome of the prisoner’s dilemma game?
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Ответ:
'Scarcity' is defined as the economic concept that refers to the situation of 'having finite resources and infinite demands.'
The concept of 'Scarcity' explains:
C). why consumers are willing to pay high prices for items.
D). why decisions must be made on how to use resources
F). why a single resource has more value than another resource.
The term 'scarcity' elaborates the causes of all the above-stated problems. Since the demand for produced goods, as well as, services is endless and the resources available to meet this demand are limited, there is an imbalance between the demand and supply. This leads to the hike in prices of the available goods so that one could afford to pay higher will take the good. This makes it important for deciding upon the efficient utilization of resources so that every individual's demand can be satisfied up to some extent.The single resources cost higher due to this reason only as it develops a competition among the buyers.Learn more about 'scarcity' here: