Suppose Ann is working on a project with John. Both must decide whether to put into a decent amount of effort into the project. Since Ann is the leader of the project, her contribution determines whether the project will be successful. If she puts into a decent amount of effort, the project will be finished on time and each will enjoy 3 units of benefit. If she decides not to do so, the project will not be finished on time, neither one will get benefit. Suppose a decent amount of effort incurs a cost of 1 unit for each person. Use the normal form represent the situation and identify the Nash Equilibrium if there is any. Would both be happy about the outcome and why? 

  • CreatedAugust 26, 2013
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