Kyrgyzstan Finance Assingment Help With Solution

Kyrgyzstan Finance Assingment Help With Solution


  1. Recently, France sought United Nations Security Council approval for its military intervention in the civil war in Mali. France has preferences over possible outcomes of the situation represented by the following utility numbers:
    • u(Peaceful Resolution)= 5
    • u(Malian Government Successful Violent Crackdown) = 2
    • u(French Military Intervention with UNSC Support)= 2
    • u(French Military Intervention without UNSC Support)= 1 • u(Rebel Overthrow of the Malian Government)= -3
    a. Write down France’s complete preference relations with respect to each pair of possible resolutions (i.e., this answer has ten parts) using the notation introduced in class.
    b. Are these preferences rational? Why or why not?
    c. True/False/not enough information to say: France would prefer any outcome except rebel overthrow to a continuation of the status quo–ongoing fighting. Justify your answer.
    d. France estimates that if it does not intervene, there is a 10% chance of peaceful resolution, a 60% chance of successful crackdown, and a 30% chance of rebel overthrow. If UNSC refused to authorize the mission, should France intervene without support or stay out?

    1. Brazil and India lead the world, by a considerable margin, in sugar production. Each must decide individually how much to subsidize its domestic sugar industry. Subsidies are costly, but (if they enable domestic growers to out-compete international competitors) can boost the industry, bringing economic and political benefits. Each can chose a low, medium, or high level of subsidies, with payoffs over outcomes represented in the table below.


    Low        Med       High

    5,5 2,8 0,4
    7,2 0,0 -3,6
    3,3 1,-2 -4,3
      a. Which (if any) strategies are strictly dominated for a given actor in the whole game?
      b. Which outcomes survive iterated deletion of strictly dominated strategies?
      c. Which (if any) outcomes are Nash Equilibria?

      1. Consider a model of the 2014 emissions negotiations between China and the United States. Both states want to provide a stable and healthy environment for the future, and it is more likely to happen if they undertake cutbacks in industrial pollution. However, these cutbacks cost some amount of money c, which is somewhere between 0 and 10 (continuous). Payoffs are shown in the game matrix below. Find all equilibria of the game for all possible ranges of c.


      Cutback          No

      8-c, 8-c 4-c,6
      6,4-c 1,1

      Consider which values of c are meaningful in changing the strategic structure, and express your answer in the form of ‘if c is between w and x, equilibria are such; if c is between x and y, equilibria are such; if c is between y and z, equilibria are such, etc’.

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      4. The United Nations is deciding whether to approve an expanded peacekeeping mission in the Democratic Republic of the Congo. The five permanent members–the United States, the United Kingdom, Russia, China, and France–are deciding whether to vote for or against the mission. Each has veto power, so only if all five vote in favor will it be authorized. They all want, as a first priority, for the mission to not be approved: it would cost resources and troops they’re not willing to provide. However, they would rather be seen voting in favor, to receive the social positive of appearing to support conflict prevention. That is, each would prefer any outcome where the mission is denied to any outcome where it is approved, and within those groupings they prefer outcomes where they voted for it to those where they voted against it.
      a. Identify the set of actions available to a given actor (say, China).
      b. How many total outcomes are possible in the game (remember: outcomes are defined as complete sets of actions, one for each player)? Write down at least 3 of these possible outcomes.
      c. Which of these outcomes are equilibria? (Hint: rather than attempting to write down the game tables, think about characteristics of outcomes which do and do not meet the definition of Nash equilibrium).
      5. Kyrgyzstan and Tajikistan have a territorial dispute over the Isfara Valley, a small area in Central Asia known for its apricot farms. Tensions are high, and both sides are considering military action to assert territorial control. The dispute can be represented using a spatial model based on the Fearon framework, where each state’s ideal point is to control the entire area (so Tajikistan’s ideal point is outcome 10, Kyrgyzstan’s is 0, and compromise positions are on the interval (0,10)). Kyrgyzstan is slightly more powerful, and has local geographical advantages, so would have a 60% chance of winning should war occur.
      States have a baseline utility of 0, and lose 1 point for each unit of space they are from their ideal point. Each also pays a cost c if war occurs, which is equal in utility to 1.5 units of territory. That is, a state receiving the entire territory without fighting (the best possible outcome) would receive a utility of 0, and a state losing the entire territory with fighting (the worst possible outcome) would receive a utility of -11.5. Formally, their utility functions from a given point ˆx are:

           ui(xˆ) = −|xˆ −xi| − c
      Assume that, if a war outcome and a non-war outcome have the same utility, states prefer the non-war outcome. Suppose each issues a (simultaneous) demand di for a share of the territory, and the outcome that results is:

      ifdT+ dK<10:              each receives its demand, plus half the remaining surplus

      ifdT+ dK= 10:           each receives its demand exactly

      ifdT+ dK>10:               war occurs (incurring costs), decided by the probability specified above

      1. Identify the set of peaceful divisions of territory that Tajikistan prefers to war.
      2. Identify the set of peaceful divisions of territory that Kyrgyzstan prefers to war.
      3. Find all peaceful Nash equilibria of the interaction (that is, strategy profiles which are Nash equilibria, and in which no war occurs).
      4. Are there any non-peaceful Nash equilibria of the interaction (where war does occur)? If so, identify one such strategy profile and explain why it meets the criteria; if not, explain why none exist.


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