During October 1962 the United States and the Soviet Union engaged in a stand oﬀ over...

During October 1962 the United States and the Soviet Union engaged in a stand oﬀ over the Soviet Union’s attempted deployment of nuclear missiles to Cuba. We will model part of the crisis dynamics as they looked on October 22, 1962 when President Kennedy announced the naval blockade of Cuba stating that Soviet ships carrying nuclear missile equipment would be turned back if attempting to enter Cuba. Consider this a sequential move game where the ﬁrst mover Premier Krushchev can choose to retract (R) the ships or order them to challenge (C) the blockade. If Krushchev retracts, the game ends and it will be perceived as a political failure for Krushchev and a win for Kennedy with payoﬀ 2 of (−1, 1), meaning a payoﬀ of −1 to Krushchev and 1 to Kennedy. If Krushchev challenges the blockade, Kennedy will observe the challenge and now has an option to enforce (E) the blockade or to fold (F), the latter meaning letting the ships proceed to Cuba. If Kennedy folds the game ends, and Krushchev will deploy nuclear missiles to Cuba and achieve an improved strategic position, resulting in payoﬀs of (5, −5). If Kennedy enforces the blockade, the crisis will escalate with the distinct possibility of nuclear war ensuing. We will assign payoﬀs (−100, −100) to the act of enforcing the blockade. 1. Draw the extensive form game between Krushchev and Kennedy. 2. What are the pure strategy Nash equilibria of the game? Explain. 3. What is the subgame perfect Nash equilibrium of the game? Explain. 4. In reality, Kruschev retracted the ships. The following is an open ended question: In order to understand this action, how is it in your mind best understood given the previous analysis? Is the equilibrium concept not appropriate? Would you consider changes in the game? Etc...

Expert Solution

Rahul Sunny answered 2 years ago

During October 1962 the United States and the Soviet Union engaged in a stand off over...

During October 1962 the United States and the Soviet Union engaged in a stand off over the Soviet Union’s attempted deployment of nuclear missiles to Cuba. We will model part of the crisis dynamics as they looked on October 22, 1962 when President Kennedy announced the naval blockade of Cuba stating that Soviet ships carrying nuclear missile equipment would be turned back if attempting to enter Cuba. Consider this a sequential move game where the first mover Premier Krushchev can...

How did the United States and the Soviet Union shape the cold war? HISTORY!

How did the United States and Soviet Union shift the focus of the Cold War to...

How did the United States and Soviet Union shift the focus of the Cold War to the Third World? Answer in 2 paragraphs with 5 sentences min

What was the Early Cold War? How did the United States and Soviet Union come to...

What was the Early Cold War? How did the United States and Soviet Union come to regard each other during this period? Be sure to talk about key ideas and events as well as America’s overall foreign policy stance during this period.

The Cold War that divided world between the United States and the Soviet Union broke out...

The Cold War that divided world between the United States and the Soviet Union broke out after the end of the Second World War. Discuss how the Cold War was based on ideas and concerns.

4. Why did the United States and the Soviet Union find themselves in a “Cold War”...

4. Why did the United States and the Soviet Union find themselves in a “Cold War” after World War II? Why was it referred to as a “Cold War?” How did the Cold War shape American domestic life and foreign policy? ESSAY QUESTION PLEASE ANSWER FULLY

The United States accused the Soviet Union of breaking all its wartime pledges and holding Eastern...

The United States accused the Soviet Union of breaking all its wartime pledges and holding Eastern Europe hostage while trying to subvert governments in the west. The Soviet Union accused the US and its allies of trying surround and ultimately destroy it. War of words? Or was somebody telling the truth? And where do our 'Isms' fit in? In particular nationalism?

During the 1950s, both the United States and Soviet government's implemented their own forms of so-called...

During the 1950s, both the United States and Soviet government's implemented their own forms of so-called "civil defense," to help their civilian populations respond to the new nuclear threat. Describe the official purpose of these programs, and also address the following questions: 1) Were the civil defense programs actually useful or realistic? Why or why not? 2) If they were not realistic in terms of helping people survive a thermonuclear attack, what purpose did they serve?

Why has Joseph Stalin successful in taking over the Soviet Union?

Q1. During the last decades, in the United States, union membership went down. Today, approximately________ %...

Q1. During the last decades, in the United States, union membership went down. Today, approximately________ % of workers of private companies are members of unions. 1. 29 2. 19 3. 11 4. 7 Q.2 Command-and-control regulations were able to reduce pollution; however, they have shortcomings. Which one of the following four answers represents one of these shortcomings? 1. They provide incentives for a firm to go beyond the pollution limits set by the government. 2. They specify how much pollution...

Question