Hubert and Manuel are considering contributing toward the creation of a building mural. Each can choose whether to contribute $$400$ to the building

mural or to keep that $$400$ for a cell phone.

Since a building mural is a public good, both Hubert and Manuel will benefit from any contributions made by the other person. Specifically, every dollar

that either one of them contributes will bring each of them $$0\mathrm{.}80$ of benefit. For example, if both Hubert and Manuel choose to contribute, then a total

of $$800$ would be contributed to the building mural. So$,$ Hubert and Manuel would each receive $$640$ of benefit from the building mural, and their

combined benefit would be $$1,280.$ This is shown in the upper left cell of the first table.

Since a cell phone is a private good, if Hubert chooses to spend $$400$ on a cell phone, Hubert would get $$400$ of benefit from the cell phone and

Manuel wouldn't receive any benefit from Hubert's choice. If Hubert still spends $$400$ on a cell phone and Manuel chooses to contribute $$400$ to the

building mural, Hubert would still receive the $$320$ of benefit from Manuel's generosity. In other words, if Hubert decides to keep the $$400$ for a cell

phone and Manuel decides to contribute the $$400$ to the public project, then Hubert would receive a total benefit of $$400+$$$320=$$$720,$ Manuel

would receive a total benefit of $$320,$ and their combined benefit would be $$1,040.$ This is shown in the lower left cell of the first table.

Complete the following table, which shows the combined benefits of Hubert and Manuel as previously described.

Of the four cells of the table, which gives the greatest combined benefits to Hubert and Manuel?

When both Hubert and Manuel contribute to the building mural

When neither Hubert nor Manuel contributes to the building mural

When Hubert contributes to the building mural and Manuel doesn't, or vice versa

Now, consider the incentive facing Hubert individually. The following table looks similar to the previous one, but this time, it is partially completed with

the individual benefit data for Hubert. As shown previously, if both Hubert and Manuel contribute to a public good, Hubert receives a benefit of

$$640.$ On the other hand, if Manuel contributes to the building mural and Hubert does not, Hubert receives a benefit of $$720.$

Complete the right$-$hand column of the following table, which shows the individual benefits of Hubert.

Hint: You are not required to consider the benefit of Manuel.

If Manuel decides to contribute to the building mural, Hubert would maximize his benefit by choosing

On the other hand, if Manuel decides not to contribute to the building mural, Hubert would maximize his benefit by choosing

$\_$to the building mural.

to the building mural.

These results illustrate

not to contribute

$\begin{array}{cc}\text{t}\text{h}\text{e}\text{f}\text{r}\text{e}\text{e}-\text{r}\text{i}\text{d}\text{e}\text{r}\text{p}\text{r}\text{o}\text{b}\text{l}\text{e}\text{m}& \text{w}\text{h}\text{y}\text{m}\text{a}\text{r}\text{k}\text{e}\text{t}\text{s}\text{a}\text{r}\text{e}\text{e}\text{f}\text{f}\text{i}\text{c}\text{i}\text{e}\text{n}\text{t}\\ \text{t}\text{h}\text{e}\text{T}\text{r}\text{a}\text{g}\text{e}\text{d}\text{y}of\text{t}\text{h}\text{e}\text{C}\text{o}\text{m}\text{m}\text{o}\text{n}\text{s}& \text{t}\text{h}\text{e}\text{c}\text{r}\text{e}\text{a}\text{t}\text{i}\text{o}\text{n}of\text{a}\text{p}\text{o}\text{s}\text{i}\text{t}\text{i}\text{v}\text{e}\text{e}\text{x}\text{t}\text{e}\text{r}\text{n}\text{a}\text{l}\text{i}\text{t}\text{y}\end{array}$

to contribute