The only two stores in a mall decide whether to hire one guard or none-extra guards provide
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The only two stores in a mall decide whether to hire one guard or none-extra guards provide no extra protection. The guard patrolling the mall provides a service without rivalry, simultaneously protecting both stores. A guard costs 20 per hour. The benefit to each store is 16 per hour. The stores play a game in which they act independently. The table shows their payoffs. What is the outcome of this game? What is the social optimum?
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Payoff Matrix The table below represents the payoffs for the two stores based on their decisions reg...View the full answer
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Ali Khawaja
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