Question

1. Suppose certain skill could only increase the productivity if majority of workers participate in a month-long training program. Workers make their decision individually.

Payoff (William, other)	Majority of people are trained	Majority of people are not
William decide to acquire skill	1,1	-1,0
William decide not to acquire	2,1	0,0

Is there a dominant strategy for William? If yes, which one? (recall the definition for dominant strategy)

What is the name for the scenario in which William did not participate the training program, while still benefit from an overall increase in wage rates?

Answer 1

1. The Dominant Strategy is the one which is best for the player and not influenced by strategy of other player.

For William there is no dominant strategy in above game, as his payoffs are influenced by other player's strategy.

2. The scenario in which William did not participate the training program, while still benefit from an overall increase in wages is, scenario (2,1). In this scenario William still benefit even after he did not participate in training program, because majority of people are train. He has still the payoff of 2 while not participating.

I hope this is helpful, thank you.