! sopved both parts Suppose that the share of total productionconsumed by player i is x / x+(n1)y, where xis player i's level of conflict and y is the levelof conflict chosen by the other n 1 players.Thus, utility to player 1 is u = (x / x +(n1)y)A[nw-x-(n-1)y], where w > 0 theendowment of each player and A >1 is atechnology parameter.(a) Find the symmetric Nash equilibriumlevel of conflict, x* and show how conflictas a share of the endowment (x*/w) varieswith n. Hint: First derive du/əx , set it equalto zero for a maximum, and then let y= X=x* and solve for x*.(b) Why does the equilibrium level ofconflict depend upon the number of peoplein society, n, but not the state oftechnology, A

In game theory, a symmetric equilibrium is one in which all participants in the equilibrium employ…

Suppose that the share of total production consumed by player i is x/x+(n1)y, where x is player i's level of conflict and y is the level of conflict chosen by the other n 1 players. Thus, utility to player 1 is u = (x / x +(n1)y)

Suppose that the share of total production consumed by player i is x/x+(n1)y, where x is player i's level of conflict and y is the level of conflict chosen by the other n 1 players. Thus, utility to player 1 is u = (x / x +(n1)y)

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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Question

! sopved both parts

Suppose that the share of total production
consumed by player i is x / x+(n1)y, where x
is player i's level of conflict and y is the level
of conflict chosen by the other n 1 players.
Thus, utility to player 1 is u = (x / x +(n1)y)
A[nw-x-(n-1)y], where w > 0 the
endowment of each player and A >1 is a
technology parameter.
(a) Find the symmetric Nash equilibrium
level of conflict, x* and show how conflict
as a share of the endowment (x*/w) varies
with n. Hint: First derive du/əx , set it equal
to zero for a maximum, and then let y= X
=x* and solve for x*.
(b) Why does the equilibrium level of
conflict depend upon the number of people
in society, n, but not the state of
technology, A

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