Question: Two players simultaneously decide whether to contribute (C) or not (N) towards producing a public good. The good is produced if at least one

Two players simultaneously decide whether to contribute (C) or not (N) towards 

Two players simultaneously decide whether to contribute (C) or not (N) towards producing a public good. The good is produced if at least one of them contributes. The benefits derived from the public good is 1 and the cost to player i of contributing is c. The payoffs are depicted in the following table. C C1-C, 1-C N 1,1- N 1-C, 1 0,0 The benefits are common knowledge, but each player's cost is private information. Player i j believes that c; is drawn from a uniform distribution on [0, 2], indepen- dent of c;. All of this is common knowledge. Formulate this situation as a Bayesian game and find its set of Bayes-Nash equilibria (hint: consider a cutoff strategy such that C if c; k).

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