Welfare Economics-Social Choice, Game Theory and More (IEcoS (Economic Services) Economics Paper-1): Questions 1 - 3 of 3

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Question number: 1

» Welfare Economics » Social Choice, Game Theory and More

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Appeared in Year: 2011

Essay Question▾

Describe in Detail

In game theory, comment on the terms ‘maxi-min’ and ‘mini-max’.

Explanation

  • Maxi-min strategy is the conservative approach in which a player seeks to maximize the probability of minimum profit so that the degree of risk can be reduced. In this strategy, the player finds the minimum payoff in each strategy and among these chooses the one with the highest value (maximum). For e. g. Payoff matrix of firm I and II are given

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Question number: 2

» Welfare Economics » Social Choice, Game Theory and More

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Appeared in Year: 2015

Essay Question▾

Describe in Detail

State and explain the Kaldor-Hicks compensation principle.

Explanation

  • Nicholas Kaldor was the first economist to give a welfare criterion based on compensation payments. According to Kaldor’s welfare criterion, if a certain change in economic organization or policy makes some people better off and others worse off, then that change will increase social welfare if those who gain from the change would compensate the

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Question number: 3

» Welfare Economics » Social Choice, Game Theory and More

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Appeared in Year: 2016

Essay Question▾

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Distinguish between a cooperative and a non-cooperative game.

Explanation

A game is cooperative if the firm (i. e. players in the game) can arrive at an enforceable or binding contract that permits them to adopt a strategy to maximize joint profits. Suppose making of a carpet costs Rs. 1000 but the buyers value it at Rs. 2000. Fixation of price between Rs. 1000 and 2000 per carpet will yield profits.

  • In this case,

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