- 8 There Are Two Distinct Proposals A And B Being Debated In Washington The Congress Likes Proposal A And The Presid 1 (9.09 KiB) Viewed 39 times
- 8 There Are Two Distinct Proposals A And B Being Debated In Washington The Congress Likes Proposal A And The Presid 2 (46.12 KiB) Viewed 39 times
exclusive; either or both may become law. Thus there are 4 possible outcomes, and the payoffs for each of these 4 outcomes for both the congress and the president are listed below in the table below. A higher number is more desirable (representing a higher payoff.) Outcome Congress President Only A Becomes Law Only B Becomes Law Both A and B Become Law Neither Becomes Law 4 1 3 1 4 3 0 0 (a) The moves in the game are as follows. First, the congress decides to pass a bill which may contain A or B or both, or not containing either A or B (meaning not passing the bill). Then in the second stage of the game, the president decides whether to sign or veto the bill. Congress does not have enough votes to override a veto. Draw a tree for the game and find the subgame perfect equilibrium. 10 points)