Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Chapter 13, Problem 6P
To determine
Pay-off matrix and existence of pure-strategy Nash equilibrium in a penalty kick round.
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Explain what is meant by the last-mover’s advantage.
Public Good Contribution: Three players live in a town, and each can choose to contribute to fund a streetlamp. The value of having the streetlamp is 3 for each player, and the value of not having it is 0. The mayor asks each player to contribute either 1 or nothing. Each player makes a decision without knowing others’ contributions. If at least two players contribute then the lamp will be erected. If one player or no players contribute then the lamp will not be erected, in which case any person who contributed will not get his money back. Write down the strategy sets of each player, their payoffs, and find all pure-strategy Nash equilibria.
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Chapter 13 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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