Refer to table 12.2 below, suppose that two people, Fisher 1 and Fisher 2, have access to a fishing ground, and that each may choose to harvest fish in either a restrained or unrestrained fashion. What is the Nash equilibrium?

Table 12.2

Payoffs to Fisher 1 and Fisher 2 in a Common Property Resurce Prisoners' Delemma

($ of profit)

	If Fisher 2:
If Fisher 1:	No Restraint	Restraint
No Restraint	5,5	12,4
Restraint	4,12	10,10

A) Fisher 1 and Fisher 2 both choose: no restraint

B) Fisher 1 and Fisher 2 both choose: restraint

C) Fisher 1 chooses no restraint and Fisher 2 chooses restraint

D) Fisher 1 chooses restraint and Fisher 2 chooses no restraint

According to table 12.3 below, what is the Nash equilibrium if this game is non-cooperative?

Table 12.3

Payoffs to Villager 1 and Villager 2 in a Road Maintenace Game

(R is the benefits of a maintained road and the project requires a total of L hours of labor, therefore R-L/2>0 is the net utility payoff)

	If Villager 2:
If Villager 1:	Shirks	Participates
Shirks	0,0	0,-L/2
Participates	-L/2,0	R-L/2,R-L/2

A) Villager 1 chooses participating, Villager 2 chooses participating

B) Villager 1 chooses shirking, Villager 2 chooses participating.

C) Villager 1 chooses shirking, Villager 2 chooses shirking.

D) Villager 1 chooses participating, Villager 2 chooses shirking.

Table 12.2 below shows an example of:

Table 12.2 below

Payoffs to Fisher 1 and Fisher 2 in a Common Property Resurce Prisoners' Delemma

($ of profit)

	If Fisher 2:
If Fisher 1:	No Restraint	Restraint
No Restraint	5,5	12,4
Restraint	4,12	10,10

A) tragedy of the Commons

B) efficiency problem

C) the free rider problem

D)the public good problem

According to table 12.3 below, if it is an assurance game, which of the following statement is true?

Table 12.3

Payoffs to Villager 1 and Villager 2 in a Road Maintenace Game

(R is the benefits of a maintained road and the project requires a total of L hours of labor, therefore R-L/2>0 is the net utility payoff)

	If Villager 2:
If Villager 1:	Shirks	Participates
Shirks	0,0	0,-L/2
Participates	-L/2,0	R-L/2,R-L/2

A) When both villagers cooperate in maintaining the road by participating, they both are better off.

B)The Nash equilibrium outcome is Villager 1 chooses shirking, Villager 2 chooses shirking.

C)All of the above.

D)Villager 1 will choose to participate if she expected Villager 2 to participate and Villager 2 will choose to participate if she expected Villager 1 to participate.