1. Recall that in experiment 4 you decided how to allocate your personal endowment of 10 dollars between a private account, and a public good. Each dollar allocated to your private account yielded a marginal payoff of $1 to you alone. The value of the public good was 1.5 times the average contribution in your group, but all members of your group benefited equally from the public good. Your payoff was the sum of your private consumption and the value of the public good. For example, individual 1's profit was: 1 = 10 g1 + 1.5 g1 + ... + gn/ n

(b) (2 points) Suppose that each group had a "government", which could tax each group member (equally) and then invest (without loss) the proceeds in the public good. Would government taxation and provision of the public good increase player payoffs? What would the optimal tax rate be?