Timmy and Tommy are considering contributing to a project. If both contribute, each receives a payoff of 20. If neither contribute, each receives a payoff of 10
If only one person contributes, the person who contributes receives a payoff of 14 and the person who does not contribute receives a payoff of 18. Will the public goods problem prevent this project from being completed? Explain why or why not.
The public goods problem will not prevent this project from being completed. The highest payoff for each person is to contribute, regardless of the other person's strategy, so the dominant strategy for both Timmy and Tommy is to contribute.
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You have the following information on personal consumption expenditures (C) and disposable income (Yd):
Year C Yd 1 300 400 2 500 700 a. Compute the marginal propensity to consume. b. Compute the amount of savings for years 1 and 2. c. Compute the marginal propensity to save.
An increase in unplanned inventory investment for the entire economy equals the excess of
A) output over aggregate supply. B) output over aggregate demand. C) aggregate supply over output. D) aggregate demand over output.