Each of n people simultaneously chooses whether or not tocontribute 'a fixed amount toward the provision of a public good. Thegood is provided if and only if at least k people contribute, where 2 <k < n; if it is not provided, contributions are not refunded. Eachperson ranks outcomes from best to worst as follows:» (i) any outcome in which the good is provided and she does notcontribute.(ii) any outcome in which the good is provided and she contributes.(iii) any outcome in which the good is not provided and she does notcontribute.» (iv) any outcome in which the good is not provided and she contributes.If we treat above situation as a strategic game, find its Nashequilibria, to be specific, is there a Nash equilibrium in which morethan k people contribute? One in which k people contribute? One inwhich fewer than k people contribute? Explain your reasoning.

Part A) The normal form of the game Let K = 2 There are 2 Players Player 1…

Each of n people simultaneously chooses whether or not to contribute a fixed amount toward the provision of a public good. The good is provided if and only if at least k people contribute, where 2 < k < n; if it is not provided, contributions are not refunded. Each person ranks outcomes from best to worst as follows: » (i) any outcome in which the good is provided and she does not contríbute. » (ii) any outcome in which the good is provided and she contributes. ► (ii) any outcome in which the good is not provided and she does not contribute. » (iv) any outcome in which the good is not provided and she contributes. If wo troat above situuation cas stratogic ganme fincd its No sh

Each of n people simultaneously chooses whether or not to contribute a fixed amount toward the provision of a public good. The good is provided if and only if at least k people contribute, where 2 < k < n; if it is not provided, contributions are not refunded. Each person ranks outcomes from best to worst as follows: » (i) any outcome in which the good is provided and she does not contríbute. » (ii) any outcome in which the good is provided and she contributes. ► (ii) any outcome in which the good is not provided and she does not contribute. » (iv) any outcome in which the good is not provided and she contributes. If wo troat above situuation cas stratogic ganme fincd its No sh

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter17: Market Failure: Externalities, Public Goods, And Asymmetric Information

Section: Chapter Questions

Problem 12QP

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