At a company, 20 employees are making contributions for a retirement gift. Each of the 20 employees is choosing how many dollars to contribute from the interval [0,10]. The manager of these 20 employees announces that she will contribute d dollars for every dollar that an employee contributes. The payoff to employee i who makes contribution of x; dollars is b;(1+ d)x; - xị, where b; > 0. Assume that d = 2, b; = 0.25 for i = 1,2, ..., 10, and b; = 0.5 for i = 11, 12, . .. , 20 What is the best contribution level of any employee i for i = 1,2, . .., 10.
At a company, 20 employees are making contributions for a retirement gift. Each of the 20 employees is choosing how many dollars to contribute from the interval [0,10]. The manager of these 20 employees announces that she will contribute d dollars for every dollar that an employee contributes. The payoff to employee i who makes contribution of x; dollars is b;(1+ d)x; - xị, where b; > 0. Assume that d = 2, b; = 0.25 for i = 1,2, ..., 10, and b; = 0.5 for i = 11, 12, . .. , 20 What is the best contribution level of any employee i for i = 1,2, . .., 10.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![At a company, 20 employees are making contributions for a retirement gift. Each of the 20 employees is choosing how many
dollars to contribute from the interval [0,10]. The manager of these 20 employees announces that she will contribute d dollars
for every dollar that an employee contributes.
The payoff to employee i who makes contribution of x; dollars is
b;(1 + d)ӕ;
- xị, where b; > 0.
Assume that d = 2, b; = 0.25 for i = 1, 2, ..., 10, and
b; = 0.5 for i = 11, 12, ... , 20
What is the best contribution level of any employee i for i = 1, 2, ..., 10.
Numerical answer](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F02728e8c-0e0f-4e37-a55e-e2f67feb1ff9%2F71a5fd57-6acf-4ac9-868e-42a8f6bff64f%2Fknl25s_processed.png&w=3840&q=75)
Transcribed Image Text:At a company, 20 employees are making contributions for a retirement gift. Each of the 20 employees is choosing how many
dollars to contribute from the interval [0,10]. The manager of these 20 employees announces that she will contribute d dollars
for every dollar that an employee contributes.
The payoff to employee i who makes contribution of x; dollars is
b;(1 + d)ӕ;
- xị, where b; > 0.
Assume that d = 2, b; = 0.25 for i = 1, 2, ..., 10, and
b; = 0.5 for i = 11, 12, ... , 20
What is the best contribution level of any employee i for i = 1, 2, ..., 10.
Numerical answer
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