3. Consider a modified Traveler's Dilemma. In terms of strategy options that the players have and the dollars they eam, it is like the standard Traveler's Dilemma, but the players do not have endless appetite for money. They are hemits beyond a point. Up to 89 dollars, each dollar feels like a dollar. But any money, 90 dollars or more, is psychologically like 90 dollars. Assuming that players are maximizers of 'psychological' dollars instead of real dollars, describe all the Nash equilibria of this modified Traveler's Dilemma.
3. Consider a modified Traveler's Dilemma. In terms of strategy options that the players have and the dollars they eam, it is like the standard Traveler's Dilemma, but the players do not have endless appetite for money. They are hemits beyond a point. Up to 89 dollars, each dollar feels like a dollar. But any money, 90 dollars or more, is psychologically like 90 dollars. Assuming that players are maximizers of 'psychological' dollars instead of real dollars, describe all the Nash equilibria of this modified Traveler's Dilemma.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:3.
Consider a modified Traveler's Dilemma. In terms of strategy options that the players have and
the dollars they earm, it is like the standard Traveler's Dilemma, but the players do not have
endless appetite for money. They are hermits beyond a point. Up to 89 dollars, each dollar feels
like a dollar. But any money, 90 dollars or more, is psychologically like 90 dollars. Assuming that
players are maximizers of 'psychological' dollars instead of real dollars, describe all the Nash
equilibria of this modified Traveler's Dilemma.
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