Question: Question is shown in the two images below - (a) and (b) respectively: 6. (10 points) We have available T units of a divisible good

 Question is shown in the two images below - (a) and

Question is shown in the two images below - (a) and (b) respectively:

(b) respectively: 6. (10 points) We have available T units of adivisible good that must be distributed to 71 agents. Each agent i

6. (10 points) We have available T units of a divisible good that must be distributed to 71 agents. Each agent i has an ideal amount p,- of the good that they would like: any allocation that departs from this ideal, either larger or smaller, is considered undesirable: Thus, if agent i receives 33,, then their utility is |a:,v p,|. (Think of this as the cost from deviating from the ideal allocation.) The designer would like to allocate all T units, but cannot observe the ideal amount p, for any agent 7}. So the designer sets up the following game: First, each agent submits a report 7\(b) Show that reporting 7\":- : p; is a Nash Equilibrium for each player 73. (Here, p1- is the true ideal amount for each player 2' and Ti is What player 2' reports as being their ideal amount. This question asks you to show that reporting truthfully is a Nash equilibrium for each player.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!