70. Consider the following situation: ten players, each of whom is holding a $10 bill, are playing a simultaneous game in a room. In the middle of this room is a magic box. The players cannot communicate with each other, or see what the other players are doing. Each player has two actions: either put the $10 in the magic box, or keep the $10 bill. The magic box doubles the money inside it, and then distributes the resulting cash equally to each player What is this game's Nash equilibrium? (A) Everyone puts money into the box. (B) Nobody puts money into the box. (C) Five people put money into the box. (D) There is no Nash equilibrium.
70. Consider the following situation: ten players, each of whom is holding a $10 bill, are playing a simultaneous game in a room. In the middle of this room is a magic box. The players cannot communicate with each other, or see what the other players are doing. Each player has two actions: either put the $10 in the magic box, or keep the $10 bill. The magic box doubles the money inside it, and then distributes the resulting cash equally to each player What is this game's Nash equilibrium? (A) Everyone puts money into the box. (B) Nobody puts money into the box. (C) Five people put money into the box. (D) There is no Nash equilibrium.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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70
Transcribed Image Text:70. Consider the following situation: ten players, each of whom is holding a $10 bill,
are playing a simultaneous game in a room. In the middle of this room is a magic box.
The players cannot communicate with each other, or see what the other players are
doing. Each player has two actions: either put the $10 in the magic box, or keep the
$10 bill. The magic box doubles the money inside it, and then distributes the resulting
cash equally to each player5 What is this game's Nash equilibrium?
(A) Everyone puts money into the box.
(B) Nobody puts money into the box.
(C) Five people put money into the box.
(D) There is no Nash equilibrium.
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