00:01
Okay, so i see that you need help with this question.
00:02
It says, consider trade relations between united states and mexico.
00:05
Assume that the leaders of the two countries believe the payoffs to alternative trade policies are as follows.
00:12
A, what is the dominant strategy for the united states for mexico explained? so the dominant strategy for a player is the strategy that yields the highest payoff regardless of what the other player does.
00:25
For the united states, the dominant strategy would be to impose high tariffs as it gains more compared to the low tariff, because it gains more, which is the $30 billion, as compared to the low tariffs, um, which was the $25 billion.
01:09
Um, for mexico, the dominant strategy would be to impose high tariffs as it gains more, as compared to the low tariff.
01:13
The dominant strategy would be to impose low tariffs as it gains more.
01:25
It would get the $25 billion versus the $10 billion in high tariffs.
01:51
Um, for b, define nash equilibrium.
01:58
What is the nash equilibrium for trade policy? so nash equilibrium, which is the balance of the two players, is a set of strategies, one from each player, such that no player has incentive to unilaterally change her action given the other player's actions.
03:00
In this case, the nash equilibrium would be for the united states to impose high tariffs on him or his half.
03:25
So very tvĂĄ years ago, we saw the stability of the us dollar at your expectation.
03:32
Um, for a non -margin is the low misalignment of conductor assets...