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Let there be two countries X and Y. Each country has to, simultaneously and independently, decide whether to abate pollution or not. Each unit of
Let there be two countries X and Y. Each country has to, simultaneously and independently, decide whether to abate pollution or not. Each unit of pollution abatement costs 7 to the country that abates, but confers benefits of 5 per unit to both countries. If both countries abate, both experience a benefit of 10 per unit. Formulate this situation as a normal form game. What is the outcome of this game?
Do any of the countries abate pollution? Explain why/ why not.
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