In a norm room, four or you are discussing about buying a new clock. Each of you
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Question:
In a norm room, four or you are discussing about buying a new clock. Each of you has $20 in your pocket. Sup-pose that a clock costs $40, but the benefit of having a clock in the room is $6 for each of you. You come up with the idea that the cost of the clock should be distributed equally, that is, $10 per person.
a. If each of you cares only about yourself, show that contributing $0 is everyone's dominant strategy.
b. Now suppose that each of you cares about the others in the room. Show that everyone in the room will contribute their entire $20 to the clock funds.
Related Book For
Systems analysis and design
ISBN: ?978-1118808177
5th edition
Authors: Alan Dennis, Barbara Haley Wixom, Roberta m. Roth
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