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Question 2 - Investment Game You are playing an investment game with (n 1) other players. There is a risky project that might yield high
Question 2 - Investment Game You are playing an investment game with (n 1) other players. There is a risky project that might yield high return. You have two possible choices: {Invest, do not invest}. If you do invest, you ned to lock in $10,000 in the project. If you do not invest, nothing happens (you invest zero dollars). PART I: Assume that n = 2. The project requires both investors' participation. If they both invest, an investor's gross return from the project is $15,000. In case at least one investor does not invest, project returns zero (hence you lose all your capital). What is (are) the Nash equilibrium(a) of this simultaneous game? PART II: Now, assume that n is a large number (think n = 100, if this helps). The game is similar. Project now requires the following minimal percentage of participation: Return to investment is given by Gross return = {$15,000, if at least 90% invests 0, otherwise What is (are) the Nash equilibrium(a) of this simultaneous game? Question 2 - Investment Game You are playing an investment game with (n 1) other players. There is a risky project that might yield high return. You have two possible choices: {Invest, do not invest}. If you do invest, you ned to lock in $10,000 in the project. If you do not invest, nothing happens (you invest zero dollars). PART I: Assume that n = 2. The project requires both investors' participation. If they both invest, an investor's gross return from the project is $15,000. In case at least one investor does not invest, project returns zero (hence you lose all your capital). What is (are) the Nash equilibrium(a) of this simultaneous game? PART II: Now, assume that n is a large number (think n = 100, if this helps). The game is similar. Project now requires the following minimal percentage of participation: Return to investment is given by Gross return = {$15,000, if at least 90% invests 0, otherwise What is (are) the Nash equilibrium(a) of this simultaneous game
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