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April 20, 2004 Game theory Repeated Games Summary on Market Structure Chapter 15 Market Failures pp. Example with Political Parties What type of party policy to adopt? There are two broad types of views Right wing and left wing There are only 2 parties When this game is played each party decides where to locate on the continuum To win the election they need Or more of the votes Where should they locate along party lines? First assume the republicans adopt a very right wing agenda What type of agenda should the democrats adopt to win the election? By choosing to the right of the mid point but to the left of the republican agenda the democrats would get more than half of the votes and win What happens if the democrats have a fairly socialist party agenda and locate to the left of the midpoint?
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