Question
Q2. Assume that two stores occupy the Huntington Mall! These stores are facing a decision of whether to hire a security guard for the mall.
Q2. Assume that two stores occupy the Huntington Mall! These stores are facing a decision of whether to hire a security guard for the mall. The benefit, in the form of reduced theft, to each store of hiring the guard is 8. The cost of hiring a guard is $10. If either store hires a guard for the mall the other store will benefit just as much as if it had hired the guard (i.e., the guard is non-rival and non-excludable). Additionally, we will assume the one guard is just as good as two guards, thus, if both stores agree to hire a guard, they will split the cost of one guard. The following payoff matrix reflects the payoffs of firms engaged in the game where the stores simultaneously select whether to hire.
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