Author Question: In the game in Scenario 13.11, equilibrium is A) R1, C1. B) R1, C2. C) R2, C1. D) R2, C2. ... (Read 28 times)

lunatika · **on:** Jul 1, 2018

In the game in Scenario 13.11, equilibrium is

A) R1, C1.
B) R1, C2.
C) R2, C1.
D) R2, C2.
E) a mixed strategy based on all four pure strategies.

Question 2

Refer to Scenario 17.3. Moral hazard would be eliminated in this situation if

A) the insurer would always charge 300.
B) the insurer would always charge 6000.
C) the insurer could costlessly monitor whether a fire prevention program has been implemented, and adjust the premium upward if it is not.
D) the insurer could costlessly monitor whether a fire prevention program has been implemented, and adjust the premium downward if it is not.
E) the fire did not occur.