Jill and Jack both have two pails that can be used to carry water down from a hill. Each makes only one trip down the hill, and each pail of water can be sold for $4. Carrying the pails of water down requires considerable effort. Both Jill and Jack would be willing to pay $2 each to avoid carrying one pail down the hill, and an additional $3 to avoid carrying a second pail down the hill.a. If Jack and Jill each must decide whether to carry one or two pails of water down from the top of the hill, how many pails will each child choose to carry? ___ pail(s)b. Jill and Jack’s parents are worried that the two children don’t cooperate enough with one another. Suppose they make Jill and Jack share equally their revenues from selling the water. Given that both are self-interested, construct the payoff matrix for the decisions Jill and Jack face regarding the number of pails of water each should carry. Carry 1 pail Jack Carry 2 pails Jill Carry 1 pail Carry 2 pails $ for each $ for Jack $ for Jill $ for Jack $ for Jill $ for each What is the equilibrium outcome? Each will carry two pails of water. Jack will carry one pail of water and Jill will carry two. Each will carry one pail of water. Jack will carry two pails of water and Jill will carry one.
Jill and Jack both have two pails that can be used to carry water down from a hill. Each makes only one trip down the hill, and each pail of water can be sold for $4. Carrying the pails of water down requires considerable effort. Both Jill and Jack would be willing to pay $2 each to avoid carrying one pail down the hill, and an additional $3 to avoid carrying a second pail down the hill.
a. If Jack and Jill each must decide whether to carry one or two pails of water down from the top of the hill, how many pails will each child choose to carry?
___ pail(s)
b. Jill and Jack’s parents are worried that the two children don’t cooperate enough with one another. Suppose they make Jill and Jack share equally their revenues from selling the water. Given that both are self-interested, construct the payoff matrix for the decisions Jill and Jack face regarding the number of pails of water each should carry.
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Jill
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What is the equilibrium outcome?
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Each will carry two pails of water.
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Jack will carry one pail of water and Jill will carry two.
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Each will carry one pail of water.
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Jack will carry two pails of water and Jill will carry one.
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