Question

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 allowing punishment might affect the outcome.

Please answer the question below and it's better providing a relative diagram.

thanks.

Answer 1