Question

In: Statistics and Probability

Consider the following game: 3 players can contribute or not to a public good. For the...

  1. Consider the following game: 3 players can contribute or not to a public good. For the public good to be successfully created, 2 contributions are necessary (a third contribution would not add anything to the public good).
    These are the payoffs each of the three players assign to all possible outcomes:

    3: I didn't contribute but the public good was created anyway 2: I did contribute and the public good was created
    1: I didn't contribute and the public good was not created
    0: I did contribute and the public good was not created

    The decisions are made sequentially: player 1 moves, then player 2, then player 3.

    (a) Find the set of pure strategy Nash equilibria of this game if it is played as a simultaneous move game.

    (b) Find the set of subgame perfect Nash equilibria of this game when it is played sequentially.

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Expert Solution

orchestra answered 1 year ago
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