December 1, 2015

Homework Help: economics

Posted by jo on Thursday, October 21, 2010 at 2:38am.

Two people enter a bus. Two adjacent cramped seats are free. Each person must decide whether to sit or stand. Sitting alone is more comfortable than sitting next to the other person, whihc is more comfortable than standing.

a.) Suppose that each person only cares about her own comfort. model the situation as a strategic game and find nash equilibria.

b.) Suppose that each person is altruistic, ranking the outcomes according to the other person's comfort, but, out of politeness, prefers to stand than to sit if the other person stands. Model the situation as a game.

How do I go about this? Thanks

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