Assume that two individuals A and B have initial endowment of USD. 1000 each. They want to decide on building a public toilet that costs USD. 100. If the toilet is constructed each receives a benefit equal to USD 60. If both share cost, they pay 50 and gain 10. What would be the dominant strategy and what would each individual gain or loss i.

Assume that two individuals A and B have initial endowment of USD. 1000 each. They want to decide on building a public toilet that costs USD. 100. If the toilet is constructed each receives a benefit equal to USD 60. If both share cost, they pay 50 and gain 10. What would be the dominant strategy and what would each individual gain or loss i.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter18: Asymmetric Information

Section: Chapter Questions

Problem 18.10P

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