A small community has 10 people, each of whom has a wealth of $3,000. Each individual must choose whether to contribute $300 or $0 to the support of public entertainment for their community. The money value of the benefit that a person gets from this public entertainment is one half of the total amount of money contributed by all individuals in the community. This game has a Nash equilibrium in which 5 people contribute $300 and for public entertainment and 5 people contribute nothing. This game has a dominant strategy equilibrium in which nobody contributes anything for public entertainment. This game has no Nash equilibrium in pure strategies, but has a Nash equilibrium in mixed strategies. This game has a dominant strategy equilibrium in which all 10 citizens contribute $300 to support public entertainment. This game has two Nash equilibria, one in which everybody contributes $300 and one in which no- body contributes $300.

A small community has 10 people, each of whom has a wealth of $3,000. Each individual must choose whether to contribute $300 or $0 to the support of public entertainment for their community. The money value of the benefit that a person gets from this public entertainment is one half of the total amount of money contributed by all individuals in the community. This game has a Nash equilibrium in which 5 people contribute $300 and for public entertainment and 5 people contribute nothing. This game has a dominant strategy equilibrium in which nobody contributes anything for public entertainment. This game has no Nash equilibrium in pure strategies, but has a Nash equilibrium in mixed strategies. This game has a dominant strategy equilibrium in which all 10 citizens contribute $300 to support public entertainment. This game has two Nash equilibria, one in which everybody contributes $300 and one in which no- body contributes $300.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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