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 Both countries impose a tax: Tu = Tf = 2 Profits (USA, Fiji) = 10 + 10 = 20 Total Emissions (USA, Fiji) = 0 + 0 = 0 d. Neither country imposes a tax: T₁ = TF = 0 Profits (USA, Fiji) = 11 + 11 = 22 Total Emissions(USA, Fiji) = 900 + 100 = 1000 C. What is the Pure Strategy Nash Equilibrium of this game? What is t 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
icon
Related questions
Question

Find Pure Strategy Nash equilibirum then use following values for emissions.

USA/Fiji
No-Tax
No-Tax (10000,-99989)
(9900, -9989)
Tax
a. Only the US imposes a tax: Tµ = 2, Tp = 0
Profits(USA, Fiji) = 10 + 11 = 21
Total Emissions (USA, Fiji) = 0 + 100 = 100
b. Only Fiji imposes a tax: TF = 2, tµ = 0
Profits (USA, Fiji) = 11 + 10 = 21
Total Emissions(USA, Fiji) = 900 + 0 = 900
C.
Tax
(10100,-89990)
(10000,10)
Both countries impose a tax: Tu = Tf =
= 2
Profits (USA, Fiji) = 10 + 10 = 20
Total Emissions (USA, Fiji) = 0 + 0 = 0
d. Neither country imposes a tax: T₁ = TF = 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?
Transcribed Image Text:USA/Fiji No-Tax No-Tax (10000,-99989) (9900, -9989) Tax a. Only the US imposes a tax: Tµ = 2, Tp = 0 Profits(USA, Fiji) = 10 + 11 = 21 Total Emissions (USA, Fiji) = 0 + 100 = 100 b. Only Fiji imposes a tax: TF = 2, tµ = 0 Profits (USA, Fiji) = 11 + 10 = 21 Total Emissions(USA, Fiji) = 900 + 0 = 900 C. Tax (10100,-89990) (10000,10) Both countries impose a tax: Tu = Tf = = 2 Profits (USA, Fiji) = 10 + 10 = 20 Total Emissions (USA, Fiji) = 0 + 0 = 0 d. Neither country imposes a tax: T₁ = TF = 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?
Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Efficiency
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education