Question
2. (20 points) You are sitting at home one night when there is a sudden power outage, and you can see that the lights are
2. (20 points) You are sitting at home one night when there is a sudden power outage, and you can see that the lights are out in the entire neighborhood. The electric company will fix the problem, provided that somebody calls to let them know about the outage. Suppose that each person in the neighborhood benefits 5 units of payoff if the power comes back, but making the phone call costs 1 unit. You can either choose to call or choose not to call. If nobody calls the electric company then each person's payoff is 0.
(a) You live in a remote area with only one neighbor. Write down the normal form of this simultaneous-move game and find all pure strategy Nash equilibria. (10 points)
(b) You have two neighbors. Write down the normal form of this 3- player simultaneous-move game and find all pure strategy Nash equilibria. (10 points)
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