Question

Consider the following public goods game. There are more than 2 players. Each player is given...

Consider the following public goods game. There are more than 2 players. Each player is given $20 at the start. Players individually decide how much of the $20 to invest in the public good. Each $1 invested in the public good generates a benefit of $2. A player’s payoff is the $20 minus the amount they invested plus an equal share of the total benefit.
a. What is the Nash equilibrium?
b. If players could decide on investment collectively, how much would be invested?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Nash equilibrium will be at 12$ investment as as one maximize it's profit on such scenario . ( Take two situation in which A decides to invest some amount and B decides to not invest any .2- B decides to invest while A decides not to both will loosing in such scenario but in case of 12$ ~ 8$ +24/2 =20$ no one will suffer loss and in any case if other invest any amount ,it will be profitable for both.

If players coluld decide collectively they will invest total 40$ to maximize their profit.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose that a public goods game is played amongst 4 players as follows. Each player begins...
Suppose that a public goods game is played amongst 4 players as follows. Each player begins with $10. They can contribute any amount between $0 and $10 to the public good. Each dollar contributed by a player to the public good will result in 80c being received by each of the four players (including themselves). What outcome is predicted by basic game theory logic, what outcomes might expect in an experimental setting and why, and how punishment might affect the...
Suppose that a public goods game is played amongst 4 players as follows. Each player begins...
Suppose that a public goods game is played amongst 4 players as follows. Each player begins with $10. They can contribute any amount between $0 and $10 to the public good. Each dollar contributed by a player to the public good will result in 80c being received by each of the four players (including themselves). Explain what outcome is predicted by basic game theory logic, what outcomes you might expect to see in an experimental setting and why, and how...
4. Consider the following non-cooperative, 2-player game. Each player is a middle manager who wishes to...
4. Consider the following non-cooperative, 2-player game. Each player is a middle manager who wishes to get a promotion. To get the promotion, each player has two possible strategies: earn it through hard work (Work) or make the other person look bad through unscrupulous means (Nasty). The payoff matrix describing this game is shown below. The payoffs for each player are levels of utility—larger numbers are preferred to smaller numbers. Player 1’s payoffs are listed first in each box. Find...
Consider the following game. Player 1’s payoffs are listed first, in bold:                        Player 2 X...
Consider the following game. Player 1’s payoffs are listed first, in bold:                        Player 2 X Y Player 1 U 100 , 6   800 , 4 M 0 , 0 200 , 1 D 10 , 20 20 , 20 Imagine that Player 1 makes a decision first and Player 2 makes a decision after observing Player 1’s choice. Write down every subgame-perfect Nash equilibrium of this game. Does the outcome above differ from the Nash equilibrium (if the game...
1) Consider the following game in which two firms decide how much of a homogeneous good...
1) Consider the following game in which two firms decide how much of a homogeneous good to produce. The annual profit payoffs for each firm are stated in the cell of the game matrix, and Firm A's payoffs appear first in the payoff pairs: Firm B - low output Firm B - high output Firm A - low output 300, 250 200, 100 Firm A - high output 200, 75 75, 100 a. What are the dominant strategies in this...
Use the following payoff matrix for a one-shot game to answer the accompanying questions. Player 2...
Use the following payoff matrix for a one-shot game to answer the accompanying questions. Player 2 Strategy X Y Player 1 A 5, 5 0, -200 B -200, 0 20, 20 a. Determine the Nash equilibrium outcomes that arise if the players make decisions independently, simultaneously, and without any communication. Instructions: You may select more than one answer. Click the box with a check mark for the correct answers and click twice to empty the box for the wrong answers....
In a trust game, player 1 is given $10. She can send any fraction of that...
In a trust game, player 1 is given $10. She can send any fraction of that money to player 2. Player 1 keeps the remainder. Whatever money is sent to player 2 is tripled in the process (e.g. if $6 is sent by player 1, then player 2 receives $18). Player 2 then decides how much of the money she receives to return to player 1. a. When both players maximize their monetary payoff, what is the subgame perfect equilibrium...
Consider a two-player game between Child’s Play and Kid’s Korner, each of which produces and sells...
Consider a two-player game between Child’s Play and Kid’s Korner, each of which produces and sells wooden swing sets for children. Each player can set either a high or a low price for a standard two-swing, one-slide set. The game is given as below: Kid’s korner High price Low price Child’s play High price 64, 64 20, 72 Low price 72, 20 57, 57 a. Suppose the players meet and make price decisions only once. What is the Nash equilibrium...
Consider the following game played between 100 people. Each person i chooses a number si between...
Consider the following game played between 100 people. Each person i chooses a number si between 20 and 60 (inclusive). Let a-i be defined as the average selection of the players other than player i ; that is, a-i = summation (j not equal to i) of sj all divided by 99. Player I’s payoff is ui(s) = 100 – (si – (3/2)a-i)2 For instance, if the average of the –i players’ choices is 40 and player i chose 56,...
Mixed Strategies Consider the following game between two players Bad-Boy and Good-Girl. Bad-Boy can either behave...
Mixed Strategies Consider the following game between two players Bad-Boy and Good-Girl. Bad-Boy can either behave or misbehave whereas Good-Girl can either punish or reward. Below payoff matrix shows the game as pure strategies. Good Girl Reward Punish Bad Boy Behave 5, 5 -5,-5 Misbehave 10,-10 -10,-5 Question 41 (1 point) What is the Nash equilibrium of the game in pure strategies? Question 41 options: Behave-Reward Behave-Punish Misbehave-Punish There is no Nash equilibrium in pure strategies. Question 42 (1 point)...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT