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2. Suppose several friends go out to dinner with the understanding that the bill will be divided equally. The problem is that someone might order

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2. Suppose several friends go out to dinner with the understanding that the bill will be divided equally. The problem is that someone might order something expensive, knowing that part of the cost will be paid by others. To analyze such a situation, supposen diners are present, and, for simplicity, they have the same food preferences. The accompanying table states the price of each of three dishes on the menu and how much each person values it. Value is measured by the maximum amount the person would be willing to pay for the meal. Dining Dilemma Dish Value Price Surplus Pasta Primavera 521.00 514.00 $7.00 Salmon 526.00 521.00 55.00 Filet Mignon 529.00 530.00 -51.00 Surplus is just the value assigned to the meal, less the meal's price. The pasta dish costs $14 and each diner assigns it a value of $21. Thus, if a diner had to pay for the entire meal, then each diner would buy the pasta dish, since the surplus of $7 exceeds the surplus from either salmon or steak. In fact, a diner would prefer to skip dinner then to pay the $30 for the steak, as reflected by a negative surplus. A player's payoff equals the value of the meal she eats, less the amount she has to pay. The latter is assumed to equal the total bill divided by the number of diners. For example, if three diners are present and each orders a different meal, then the payoff to the one ordering the pasta dish is 21- 14 + 21 + 30 = 21 - 21.67 = -0.67 the payoff for the person ordering the salmon is 26 - 14 + 21 + 30 = 43

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