Issue-spotting model and analysis. You are asked to analyze a real-world issue “ripped from the headlines,” where the techniques of game theory might be fruitfully applied to aid in developing strategy. Several suggestions are made below, but by no means are you limited to these. Characterize the involved parties, their objectives, and their strategies. Develop a

simple model to capture this interaction, identify equilibrium strategies for the in- volved parties, solve for comparative statics results, and provide economic intuition.

To start, you should be able to answer: • Who are the players? • What are their available actions, corresponding payoffs, and objective functions? • What are the rules of the game, including: – Time-frame for decisions (simultaneous, sequential, a combination of the two, etc) – What is the driver of the conflict among the parties – How do the parties interact with each other – What information is available to each player at the time of their decision Examples: (i) Amazon vs Regulators vs Brick & Mortar stores in a battle for taxing e-commerce; (ii) Tesla vs Car Dealerships; (iii) Facebook vs Google vs Apple vs consumers over privacy policies. Specific tasks in order of inclusion in your write-up: 1. Come up with a simple model that captures the essence of the interactions you chose (aim to simplify the model to the extent possible; you may not be able to capture everything that takes place in the real world and that is fine). 2. Write a brief abstract and introduction that explain your model and outline your findings. (Note: you should not complete these tasks in the exact order provided—this specific order is only for putting together your write-up.) 3. Find and summarize the most closely related literature to your model. 4. Characterize the equilibrium of your model (to the extent possible). 5. Obtain comparative statics results on this equilibrium (as possible). 6. Provide the economic interpretation and intuition for these results. 7. Summarize your findings and conclude.

DELIVERABLES:

1. Write a short paper (e.g., around 15 double-spaced pages not including any ref- erences or exhibits — exhibits such as graphs and tables are encouraged and do

not count towards the page count). You should carefully describe your model, solve for the equilibrium, obtain comparative statics results, and accurately

interpret them with economic intuition. Supporting tables and figures are en- couraged, although the upshot should be in your model and comparative statics

results. It is recommended that you first come up and “solve” a model, then seek the related literature, then write your abstract/intro/conclusions. 2. To accompany your memo, prepare several PowerPoint slides (up to 10 slides) that highlight the main points of your project.