3. One unit of cake has to be distributed between Ann and Bob, with their shares...

 

Transcribed Image Text:

3. One unit of cake has to be distributed between Ann and Bob, with their shares being respectively a and b. Both agents are altruistic, meaning that they care about the share of the other person. More precisely, their utility functions are 1 a + -b 3 Ua b+ -a 4 Suppose that you can divide the cake in any way, so that 0 < a, b < 1, and a + b < 1. (a) Find the classical utilitarian choice of a and b (10 points) (b) Find the egalitarian choice of a and b (15 points) (c) Find the Nash Collective choice of a and b (at least write the maxi- mization problem).(5 points) 3. One unit of cake has to be distributed between Ann and Bob, with their shares being respectively a and b. Both agents are altruistic, meaning that they care about the share of the other person. More precisely, their utility functions are 1 a + -b 3 Ua b+ -a 4 Suppose that you can divide the cake in any way, so that 0 < a, b < 1, and a + b < 1. (a) Find the classical utilitarian choice of a and b (10 points) (b) Find the egalitarian choice of a and b (15 points) (c) Find the Nash Collective choice of a and b (at least write the maxi- mization problem).(5 points)

Answer rating: 100% (QA)

patedict thechaiceofmulliplt decision makes The utilitayian appsaad asscsl... View the full answer