Question: Problem 3 ( Joint Project ) Two people are engaged in a joint project. If each person i puts in the effort x i i
Problem Joint Project
Two people are engaged in a joint project. If each person i puts in the effort the outcome of the project is worth and the cost to player is The worth of the project is split equally between the two people, regardless of their effort levels. Each player aims to maximize the value they get from the project, ie minus the cost.
a Formulate this situation as a strategic game.
b Find the set of pure strategy Nash equilibria for each of the following cases:
i
ii
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