b) What is the best contribution level for any employee i for i = 11,12,....,20?

c) What is the total contribution level in the Nash Equilibrium by the 20 employees (that is, excluding the contribution by the manager)? 

d) What is the contribution level of the manager in the Nash Equilibrium?

Transcribed Image Text:

At a company, 20 employees are making contributions for a retirement gift. Each of the 20 employees is choosing how many dollars to contribute from the interval [0,10]. The manager of these 20 employees announces that she will contribute d dollars for every dollar that an employee contributes. The payoff to employee i who makes contribution of x; dollars is bi (1 + d)x; Assume that d = 2, b;= 0.25 for i = 1, 2, ..., 10, and b₁ = 0.5 for i= 11, 12,..., 20 What is the best contribution level of any employee i for i = 1, 2, ..., 10. -xi, where b; > 0. At a company, 20 employees are making contributions for a retirement gift. Each of the 20 employees is choosing how many dollars to contribute from the interval [0,10]. The manager of these 20 employees announces that she will contribute d dollars for every dollar that an employee contributes. The payoff to employee i who makes contribution of x; dollars is bi (1 + d)x; Assume that d = 2, b;= 0.25 for i = 1, 2, ..., 10, and b₁ = 0.5 for i= 11, 12,..., 20 What is the best contribution level of any employee i for i = 1, 2, ..., 10. -xi, where b; > 0.

Answer rating: 100% (QA)

aThe best contribution level for any ... View the full answer