Question

2. British Prime Minister David Cameron is deciding whether or not to commit British Aircraft to the bombing of ISIS in Syria and Iraq. He is aware that the French President Francois Hollande is facing a similar decision. The following is known i. If both countries decide to commit to the bombing the threat of terrorist attacks will be mini- mized, the best outcome for both. ii. If neither bombs they will each face infrequent terrorist attacks, a worse outcome than if they both bomb iii. If one country bombs and the other does not they will not greatly reduce ISIS's ability to mount terrorist attacks and the country that bombs will be the target of most of these attacks. The country that bombs will be worse off than in the case where neither bombs, while the country that does not bomb will be better off than in the case where neither bombs, but worse off than in the case where they both bomb. a) Construct a payoff matrix to llustrate this game and identify what type of game it represents. (b) What is the key problem faced by the leaders? (c) If Hollande were to take the initiative and make the decision for France before Cameron decides how might this change the game and the payoffs of the players? Explain using a game tree.

Answer 1

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