Question

There are 40 fish in a lake and 10 fishermen who catch fish. There are two days allowed for​ fishing, and after the first​ day, whatever fish remain in the lake will double in number. The options are to fish​ "lightly" and catch 2 fish or fish​ "intensively" and catch 4 fish. On the first​ day, each fisherman gets 2 or 4 ​fish, based on this choice. On the second​ day, the available fish are split evenly among all fishermen. For​ example, if 4 fishermen choose to fish lightly and 6 choose to fish​ heavily, then the 8 remaining fish will double to 16 and these are split evenly on the second day. In this​ example, fishermen who fish lightly end up with 2 + 16/10 =3.6 fish​, while fishermen who fish heavily end with up 4 +16/10=5.6 fish.

In order to maximize the total number of fish caught over the span of two​ days, the fishermen should collectively BLANK .

Suppose the fishermen collectively fish lightly on the first day. The maximum number of fish each fisherman can catch in the two days is BLANK.

Suppose Josh is one of the fishermen. If he knows all the other 9 fishermen are fishing lightly on the first​ day, his best strategy to maximize his catch should be to BLANK.

Suppose Josh knows all the other 9 fishermen are fishing lightly on the first day. The maximum number of fish Josh will end up with is BLANK. ​(Round answer to 1 decimal place as​ needed)

Suppose Josh knows that all the other 9 fishermen are fishing intensely on the first day. His best strategy to maximize his catch should be to BLANK .

Suppose Josh and all the other 9 fishermen are fishing intensely on the first day. The maximum number of fish Josh will end up with is BLANK .

The maximum number of fish caught by all the fishers in two days is BLANK .

Which of the following explains a situation in which an individual fisherman will never fish lightly on the first​ day?

A. The​ free-rider problem. B. Invisible hand of the market. C. ​Prisoner's dilemma. D. The tragedy of the commons.

Answer 1

1> Should collectively fish lightly

Reason

If they fish lightly, the fish numbers will double in the next day which is the best social outcome.

2> All fisherman catch 2 fishes then, so, there will be 20 remaining fish which will double to 40 where each get 4, so each one will get 6 fishes in total.

3> should be heavy fishing.

Reason

If he fishes heavily, he gets 4 from first period and 36/10=3.6 from next period, thus a total of 7.6 fishes which is more than 6.

4> The maximum is 7.6 fishes.

5> To catch fishes intensely.

6> If he fishes lightly, he gets 2+2x2/10=2.4 fishes, if he fishes intensely, he gets 4 fishes. So, max is 4

7> It is 6, the social optimum and 4, the nash equilibrium

8> C. ​Prisoner's dilemma.

Reason

Here, by playing the dominant strategy, players are moving away from the social optimum which is the desired result.