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)x; – xi, 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 contribution level of the manager in the Nash equilibrium? Numerical answer

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)x; – xi, 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 contribution level of the manager in the Nash equilibrium? Numerical answer

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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