Game theory: Consider a collective action game with thirty individuals (N = 30). When the number of participants in the joint project is n, each individual, including shirkers, receives a benefit of B(n) = 18n and each participant incurs a cost of C(n) = 32 – 2n. Please answer the questions I am asking! 1. Find all of the Nash equilibria, both stable and unstable ones. 2. Find the socially optimal outcome. 3. Check if any of the Nash equilibria is socially optimal. Explain your answer.

Game theory: Consider a collective action game with thirty individuals (N = 30). When the number of participants in the joint project is n, each individual, including shirkers, receives a benefit of B(n) = 18n and each participant incurs a cost of C(n) = 32 – 2n. Please answer the questions I am asking! 1. Find all of the Nash equilibria, both stable and unstable ones. 2. Find the socially optimal outcome. 3. Check if any of the Nash equilibria is socially optimal. Explain your answer.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.9P

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