1.

Throughout this lab you were randomly assigned into = 4 person groups at the start of each treatment. Each treatment lasted a total of 5 periods with your group members remaining fixed throughout the treatment. In all periods of the lab, you earned $1.00 for each token kept in your private account.

In periods 1-5 of the lab, all tokens invested in the group account led to a $0.75 return for each group member including yourself. In other words, each token invested in the group account earned a total $3.00 for the group, which was distributed equally to all = 4 members (i.e. $0.75 to each group member).

-If all 4 participants put all of their 25 tokens in their private account, how much would each person earn in a given period?

-If all 4 participants put all of their tokens in the group account, how much would each earn in a given period?

-Finally, if everyone else put all of their tokens in the group account but you put all of your tokens in your private account, how much would you earn in a given period? And in this case, how much would the other participants who put all of their tokens in the group account earn?

Show your work for each these calculations for full credit.

2.

In periods 6-10, each participant again earned $1.00 for each token kept in their private account. In these periods, however, each token invested in the group account earned $1.20 total for the group, which was distributed equally to all = 4 participants (i.e. $0.30 to each group member).

Repeat the same calculations that you made for question #1, but now do this for periods 6-10.

Show your work for each of these calculations.

Based on your calculations, what is the optimal strategy for each player in the game assuming that every participant is self-interested?

That is, how many of the 25 tokens should you invest in the group account and how many should you invest in the private account? Explain briefly.

Finally, what is the efficient outcome of the game? That is, to reach efficiency how many of the 25 tokens should you invest in the group account and how many should you invest in the private account? Explain briefly.