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4 Butch and Marcellus can each choose to contribute or not contribute to the picnic. They choose simultaneously. If at least one person contributes. both
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Butch and Marcellus can each choose to contribute or not contribute to the picnic. They choose simultaneously. If at least one person contributes. both will enjoy the picnic. which is worth 1! :2: {II to each of them; 1.: is common knowledge. If neither contributes. they both get D. The cost of contributing, howeyer. differs among players and is their type. The common prior holds that players' costs of contributing c3 and c\" are drawn from independent uniform distributions on Ill. 1]. {a} Suppose Marcellus' strategy is to contribute if c.\" :1 c3\". where cf\" c I is some cutoff point. For a given on. what is Butch's expected payoff when he contributes. and what is it when he doesn't? Find Butch 's best response to Marcellus' cutoff strategy. (b) Find a BNE in which Butch and Marcellus use symmetric cutoff strategiesStep by Step Solution
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