18. Two neighbors consider cleaning their street on a Sunday morning. Each neighbor has one hour...

Transcribed Image Text:

18. Two neighbors consider cleaning their street on a Sunday morning. Each neighbor has one hour that he can use to watch TV or to clean the street. Denote by c the time dedicated to cleaning the street and by Neighbor i, and 1 - c; the time spent watching TV. Each neighbor considers that it is important that the street is clean and likes watching TV. Their utility functions are: C2 U(C1, C2) = 2 In = 2 ln (1 + c + +1-C1 U (C1, C2) = 2 In (1+ C1 + c ) + 1 c - U2 where 2 In (1 + c; + 2/4) represents the utility of living in a clean street for Neighbor i and 1 c is the utility from watching TV for Neighbor i. Calculate and represent - Ci graphically the best response functions and the Nash equilibria of the game when both neighbors take their decision simultaneously. 18. Two neighbors consider cleaning their street on a Sunday morning. Each neighbor has one hour that he can use to watch TV or to clean the street. Denote by c the time dedicated to cleaning the street and by Neighbor i, and 1 - c; the time spent watching TV. Each neighbor considers that it is important that the street is clean and likes watching TV. Their utility functions are: C2 U(C1, C2) = 2 In = 2 ln (1 + c + +1-C1 U (C1, C2) = 2 In (1+ C1 + c ) + 1 c - U2 where 2 In (1 + c; + 2/4) represents the utility of living in a clean street for Neighbor i and 1 c is the utility from watching TV for Neighbor i. Calculate and represent - Ci graphically the best response functions and the Nash equilibria of the game when both neighbors take their decision simultaneously.