Economic Analysis of Social Issues 1st Edition by Alan Grant

Exercise 16

[Related to Application 3.1 on page 65] During the height of the Cold War, the United States and the U.S.S.R. each possessed enough nuclear weapons to destroy the world many times over. Draw a parallel between the arms race and the tobacco advertising problem presented in Application 3.1. Then model the arms race as a game, choosing players, strategies, and payoffs. Explain your choices carefully.