SUMMATIVE ASSIGNMENT

SUMMATIVE ASSIGNMENT

Answer both part A and part B of this assignment. For Part A, the word limit is 1200 words and for Part B the word limit is 800 words.

For part A show your detailed work and specify any assumption you may need to make for the consistency and coherence of your answer. In part B, which is thematically related to some key elements of part A, present your answer to the question in the form of a short essay of 800 words based on at least three scholarly economics journal articles.

PART A:  (60 marks)

Consider a bargaining game. Players 1 and 2 are bargaining over how to split £1. Both players simultaneously announce shares they would like to have, s₁ and s₂, where 0 ≤ s₁, s₂ ≤ 1. If s₁ + s₂ ≤ 1, the players receive the shares they announced. However, if s₁ + s₂ > 1, both players receive zero.

1. What are the pure-strategy Nash equilibria of this game? Explain your answer.                                                            (15 marks)

1. What do you think are the issues with this game to prevent it from being used in real life? How would you amend it so that it can be more viable to be used in real life? Explain your answer. (20 marks)

• Read Ernst FehrKlaus M. Schmidt (1999) A Theory of Fairness, Competition, and Cooperation, The Quarterly Journal of Economics, Volume 114, issue 3, pp. 817–868. Consider the utility function on p. 822 and suppose that α = 1 and β = 0 for both players. What are the pure-strategy Nash equilibria of this game? Explain your answer.

(15 marks)

1. Consider the Fehr-Schmidt preferences from the above. But consider that the players can only propose multiples of £0.05, i.e., 0, 0.05, 0.10, 0.15,…, 0.95, 1. Suppose α = 5 and β = 0. What are the pure-strategy Nash equilibria of this game? Explain your answer.       (10 marks)

PART B: (40 marks)

Drawing on economic literature, assess how social preferences may affect tax policy preferences of individuals and which other factors may mediate the impact of social preferences on tax policy preferences?

Overall word limit of : 2000 words

Assignments should be typed, using 1.5 spacing and an easy-to-read 12-point font. You should use double-sided printing, and ensure that assignments are securely bound. Written assignments and dissertations/business projects must not exceed the word count indicated in the module handbook/assessment brief.

The word count should:

• Include all the text, including title, preface, introduction, in-text citations, quotations, footnotes and any other items not specifically excluded below.
• Exclude diagrams, tables (including tables/lists of contents and figures), equations, executive summary/abstract, acknowledgements, declaration, bibliography/list of references and appendices. However, it is not appropriate to use diagrams or tables merely as a way of circumventing the word limit. If a student uses a table or figure as a means of presenting his/her own words, then this is included in the word count.

Examiners will stop reading once the word limit has been reached, and work beyond this point will not be assessed. Checks of word counts will be carried out on submitted work, including any assignments or dissertations/business projects that appear to be clearly over-length. Checks may take place manually and/or with the aid of the word count provided via an electronic submission. Where a student has intentionally misrepresented their word count, the School may treat this as an offence under Section IV of the General Regulations of the University. Extreme cases may be viewed as dishonest practice under Section IV, 5 (a) (x) of the General Regulations.

Very occasionally it may be appropriate to present, in an appendix, material which does not properly belong in the main body of the assessment but which some students wish to provide for the sake of completeness. Any appendices will not have a role in the assessment – examiners are under no obligation to read appendices and they do not form part of the word count. Material that students wish to be assessed should always be included in the main body of the text.

Guidance on referencing can be found in the programme handbook and on DUO.

MARKING GUIDELINES

Performance in the summative assessment for this module is judged against the following criteria:

• Relevance to question(s)

• Organisation, structure and presentation
• Depth of understanding
• Analysis and discussion
• Use of sources and referencing
• Overall conclusions

PLAGIARISM AND COLLUSION

Students suspected of plagiarism, either of published work or the work of other students, or of collusion will be dealt with according to School and University guidelines.

END OF ASSESSMENT