D Question 9 8 pts The National Collegiate Athletic Association (NCAA) is the ma
ID: 1135305 • Letter: D
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D Question 9 8 pts The National Collegiate Athletic Association (NCAA) is the main governing body for athletics for major colleges and universities in the United States. It is useful to divide the NCAA member schools into two categories: 6) the "Power 5 conference schools (ACC, SEC, Big 10, Big 12, and Pac 12) plus Notre Dame, and (i) all others. The Power 5 (henceforth denoted P5) have on average much higher revenues and expenses in their athletic programs than do the other schools. For years the P5 schools have proposed legislation that would have been beneficial to the P5, but because it would have hurt the other schools, and because there are more other schools than P5 schools, these proposals were always been voted down until recentl This process may be viewed as a sequential game that is similar to the "morning self, night self" game shown on page 178 of the Dixit and Nalebuff book. In this instance, the two players are the "P5" and the "Others." The payoffs might be something like total revenues from athletics in Billions of $. The relevant game tree for this "Initial Game" is shown below. The P5 would make a proposal granting themselves more independence, and it was up to the Others to approve or reject the proposal. As you can see, the approval meant that the P5 gain but the Others lose, and as a result the Others naturally voted to reject Leading up to a vote in early August of last year, the P5 made a slightly veiled threat to leave the NCAA and set up their own governance body The departure of the P5 schools would have jeopardized the NCAA men's basketball tournament, which generates a great deal of money for the Others. Carrying out this threat would have imposed costs on the P5, however, because it would have required a complete reorganization of the structure of intercollegiate athletics. This threat "changed the game" in a way that changed the outcome of the vote, and in early August the Other schools accepted the P5 proposal for more autonomy "Game After P5 Threat") is shown below the tree for the "Initial Game". The payoffs of the game are now Your answer to this quiz should begin with specific numbers for entries A, B, C, and D of the form given as A, B, C, and D. A x - End PgUpExplanation / Answer
1. The values for (x,y)and (z,w) in first condition could be (2,10) and (5,2) respectively. in this case P5's threat is not credible because he has some cost to his action and a rational player will never take such action in which he has some cost associated with.
2. The possible values for (x,y) and (z,w) could be (2,10) and (1,5) respectively. In this case the others find it in their own interest to accept P5's proposal. it is profitable for others to choose accept the P5's proposal because P5's threat reduced the payoff of rejection the proposal and now the payoff of accepting is more than the payoff of reaction.
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