ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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At a company, 20 employees are making contributions for a retirement gift. Each of the 20 employees is choosing how many
dollars to contribute from the interval [0,10]. The manager of these 20 employees announces that she will contribute d dollars
for every dollar that an employee contributes.
The payoff to employee i who makes contribution of x; dollars is
b;(1 + d)ӕ;
- xị, where b; > 0.
Assume that d = 2, b; = 0.25 for i = 1, 2, ..., 10, and
b; = 0.5 for i = 11, 12, ... , 20
What is the best contribution level of any employee i for i = 1, 2, ..., 10.
Numerical answer
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Transcribed Image Text:At a company, 20 employees are making contributions for a retirement gift. Each of the 20 employees is choosing how many dollars to contribute from the interval [0,10]. The manager of these 20 employees announces that she will contribute d dollars for every dollar that an employee contributes. The payoff to employee i who makes contribution of x; dollars is b;(1 + d)ӕ; - xị, where b; > 0. Assume that d = 2, b; = 0.25 for i = 1, 2, ..., 10, and b; = 0.5 for i = 11, 12, ... , 20 What is the best contribution level of any employee i for i = 1, 2, ..., 10. Numerical answer
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