ECON3106 Politics and Economics Problem Set 4
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ECON3106 Politics and Economics
Problem Set 4
1 Bayes’rule politics
There are two possible states: θ ∈ {θA , θB }. Voters cannot observe the realized state. There is an incumbent politician who knows the true state. The politician can be of two types: g or b.
1.1 Suppose that everybody knows that a type g politi- cian says A if and only if θ = θA and a type b politician always says B . Using Bayes’ rule, state what voters believe about the politician and the state if the politi- cian says A.
1.2 Suppose that everybody knows that a type g politi- cian says A if and only if θ = θA and a type b politician always says B . Using Bayes’ rule, state what voters believe about the politician and the state if the politi- cian says B .
1.3 Suppose that everybody knows that a type g politician says A if and only if θ = θA and a type b politician always says A if and only if θ = θB . Using Bayes’rule, state what voters believe about the politician and the state if the politician says A.
2023-06-29