USA/FijiNo-TaxNo-Tax (10000,-99989)(9900, -9989)Taxa. Only the US imposes a tax: Tµ = 2, Tp = 0Profits(USA, Fiji) = 10 + 11 = 21Total Emissions (USA, Fiji) = 0 + 100 = 100b. Only Fiji imposes a tax: TF = 2, tµ = 0Profits (USA, Fiji) = 11 + 10 = 21Total Emissions(USA, Fiji) = 900 + 0 = 900C.Tax(10100,-89990)(10000,10)Both countries impose a tax: Tu = Tf == 2Profits (USA, Fiji) = 10 + 10 = 20Total Emissions (USA, Fiji) = 0 + 0 = 0d. Neither country imposes a tax: T₁ = TF = 0Profits(USA, Fiji) = 11 + 11 = 22Total Emissions(USA, Fiji) = 900 + 100 = 10001. What is the Pure Strategy Nash Equilibrium of this game? What is theequilibrium amount of global emissions?

A pure Nash Equilibrium is a situation in a game where no player can improve their payoff by…

USA/Fiji No-Tax Tax No-Tax (10000,-99989) (10100,-89990) Tax (9900,-9989) (10000,10) a. Only the US imposes a tax: Tu = 2, TF = 0 Profits(USA, Fiji) = 10 + 11 = 21 Total Emissions (USA, Fiji) = 0 + 100 = 100 b. Only Fiji imposes a tax: TF = 2, Tu = 0 Profits(USA, Fiji) = 11 + 10 = 21 Total Emissions (USA, Fiji) = 900 + 0 = 900 c. Both countries impose a tax: T₁ = TF = 2 Profits(USA, Fiji) = 10 + 10 = 20 Total Emissions(USA, Fiji) = 0 +0=0 d. Neither country imposes a tax: T₁ = TƑ = = 0 Profits(USA, Fiji) = 11 + 11 = 22 Total Emissions (USA, Fiji) = 900 + 100 = 1000 1. What is the Pure Strategy Nash Equilibrium of this game? What is the equilibrium amount of global emissions?

USA/Fiji No-Tax Tax No-Tax (10000,-99989) (10100,-89990) Tax (9900,-9989) (10000,10) a. Only the US imposes a tax: Tu = 2, TF = 0 Profits(USA, Fiji) = 10 + 11 = 21 Total Emissions (USA, Fiji) = 0 + 100 = 100 b. Only Fiji imposes a tax: TF = 2, Tu = 0 Profits(USA, Fiji) = 11 + 10 = 21 Total Emissions (USA, Fiji) = 900 + 0 = 900 c. Both countries impose a tax: T₁ = TF = 2 Profits(USA, Fiji) = 10 + 10 = 20 Total Emissions(USA, Fiji) = 0 +0=0 d. Neither country imposes a tax: T₁ = TƑ = = 0 Profits(USA, Fiji) = 11 + 11 = 22 Total Emissions (USA, Fiji) = 900 + 100 = 1000 1. What is the Pure Strategy Nash Equilibrium of this game? What is the equilibrium amount of global emissions?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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