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Consider the following game of voluntary contributions to a public good. There are two players, 1 and 2, indexed by i, that simultaneously choose contributions
Consider the following game of voluntary contributions to a public good. There are two players, 1 and 2, indexed by i, that simultaneously choose contributions to finance a public good. That is, player i chooses gt, a non-negative number. These contributions are used to buy a public good that both players enjoy, although in different degrees. In particular, the payoffofplayeriism-(9391) = a,ln(31 + g2) 9,, where a, = 2, a2 = 1. Thus, player 1 values the public good more intensively, but both players value their individual contributions equally. a. Compute best responses. b. Iteratively eliminate strategies that are never a best response. c. Compute the Nash equilibrium in pure strategies. d. Compare your answers to b and c. ,. _ d_y _ fix) HINT. ify alnf[x],then ax a x)
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