A small community has 10 people, each of whom has a wealth of $3,000.Each individual must choose whether to contribute $300 or $0 to the support of public entertainment for their community.The money value of the benefit that a person gets from this public entertainment is .50 times the total amount of money contributed by individuals in the community.
A)This game has a dominant strategy equilibrium in which all 10 citizens contribute $300 to support public entertainment.
B)This game has two Nash equilibria, one in which everybody contributes $300 and one in which no-body contributes $300.
C)This game has no Nash equilibrium in pure strategies, but has a Nash equilibrium in mixed strategies.
D)This game has a Nash equilibrium in which 5 people contribute $300 and for public entertainment and 5 people contribute nothing.
E)This game has a dominant strategy equilibrium in which nobody contributes anything for public entertainment.

Question

Quizplus · Accepted Answer

If nobody contributes, each person retains their $3,000. If someone contributes, they lose $300, but the benefit they receive is only $150 (0.50 times $300), which is less than the cost. Therefore, the dominant strategy for each individual is to contribute nothing.

A Small Community Has 10 People, Each of Whom Has