Question

Question 3 (4 points

Consider the following modelled bargaining scenario between Chile and Bolivia:
U
Chile
Assume that
- Both Bolivia and Chile are rational, self-interested utility-maximizers, and have
complete information
ace gand mare possible bargains.
- The status quo is at
The expected outcome of a war between Chile and Boliviais
- The war costs for Bolivia are 45 utility points.
The war costs for Chile are 15 utility points
Which of the following statements are TRUE? (mark all that apply
Bolivia threatens to go to war unless Chile accepts to change the status
quo to this will be a compellent threat
Chile can improve the status quo die.can Increase its utility only through wat.
Bolivia threatens to po to war unless Chile accepts to change the status
quo tomthis threat will be credible
Bolivia threatens to go to war unless Chile accepts to change the status
quo to m. Chle will not meet Bolivia's demand because Chile would rather go to
war than accept
Both Chile and Bolivia are better off with the status quo than with war.
Bolivia prefers the status quo to e.
Bolivia threatens to go to war unless Chile accepts to change the status
quo tom Chile will accept m because Chile prefers to war.
On this scenario, it is very likely that the status quo will remain unchanged.
Chile is very likely to end up worse off than when the bargaining started.
Both Chille and Bolivia are better off with than with war.
Bolivia can improve the status quol.e. can increase its utility) only through war.
in this scenario, war is very unlikely.
Chile prefers the status quo to e
Both Chile and Bolivia are better off with e than with war.
O Bolivia threatens to go to war unless Chile accepts to change the status
quo to m Chile will ignore the threat because Bolivia is bluffing
O Bolivia threatens to go to war unless Chile accepts to change the status
quo to m, this will be a deterrent threat

Answer 1

The following statements below are true regarding Chile and Bolivia status quo and the tendency to go to war:

O Bolivia threatens to go to war unless Chile accepts to change the status quo to m. Chile will not meet Bolivia's demand because Chile would rather go to war than accept

O Bolivia threatens to go to war unless Chile accepts to change the status

quo to m Chile will ignore the threat because Bolivia is bluffing.

Step-by-step explanation: