It is possible to reconfigure the payoffs in the game in Exercise S3 so that the children’s…

It is possible to reconfigure the payoffs in the game in
Exercise S3 so that the children’s statement in their ad is a threat, rather
than a promise. (a) Redraw the tree from part

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(a) of Exercise S3 and fill in payoffs for both players
so that the children’s statement becomes a threat in the full technical sense.

(b) Define the status quo in your game, and determine
whether the threat is deterrent or compellent.

(c) Explain why the threatened action is not
automatically credible, given your payoff structure.

(d) Explain why the implied promise is automatically
credible.

(e) Explain why the children would want to make a threat
in the first place, and suggest a way in which they might make their threatened
action credible.

 

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