Question

In: Economics

At the moment, we are facing the pandemic of Covid-19. The virus spreads due to people's...

At the moment, we are facing the pandemic of Covid-19. The virus spreads due to people's mobility and the crowd. However, the government plans to conduct the general election on 7 November 2020, and starting from 1 October, each political party and candidate may start the campaign. Now, the problem is as follows: a) each candidate may follow the COVID-19 protocol during the campaign, by doing the campaign via zoom/ google meets (online campaign). They may also do the campaign via radio, or the internet, or social media. In these circumstances the payoffs of the game will be desirable for all society. B) however, the advantages of the online campaign may not be as dominant as the direct campaign. Indeed, the direct campaign is favorable for all the candidates, however, it may create a cluster of the spread of the virus.

Now your task is to develop a game, consisting of 2 players, who are the candidates of the election. Each candidate has two strategies: a) comply with the protocol of Covid-19, b) not to comply with the protocol of Covid-19. Please try to design a game based on the description above and try to determine the best response and also the Nash Equilibrium

Solutions

Expert Solution

  

If the two candidates, Laura and Dean, commit to campaign online in compliance of the Covid - 10 guidelines, they will get 750 each in terms of benefis of the campaign with safety norms. No health hazards in either party. If both go offline and campaign in person, thinking it will add a personal touch, they will benefit 500 each as there will be many innocent people affected with the virus and running for treatmet, some of them even dying.

If one goes online and the other offline, the one who goes online will receive a benefit of 325, and the one who goes offline will get 950 as the latter will get much higher number of  votes becaue of the personal touch of the campaign, notwithstanding the health casualties they migh have caused.

Best response for both the candidates is not to comply with the Covid - 19 protocol and go offline, as that is the dominant strategy for each candidate. So, both Laura and Dean will not cmply with health protocol and go offline. (Offline, Offline) will be the Nash equilibrium with payoff (500, 500).


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