Hatfield and McCoy burn with hatred for each other.They both consume corn whisky.Hatfield's utility function is U = W_H - W ²_M/32 and McCoy's utility is U = W_M - W²_H/32, where W_H is Hatfield's whisky consumption and W_M is McCoy's whisky consumption, measured in gallons.The sheriff has a total of 82 gallons of confiscated whisky which he could give back to them.For some reason, the sheriff wants them both to be as happy as possible and he wants to treat them equally.The sheriff should give them each A)8 gallons and spill 66 gallons in the creek. B)16 gallons and spill 50 gallons in the creek. C)41 gallons. D)20 gallons and spill the rest in the creek. E)4 gallons and spill the rest in the creek.

Question

Quizplus · Accepted Answer

To maximize their utility equally, set W_H = W_M = W. The utility functions become U = W - W²/32. Maximizing this gives W = 16 gallons each, using all 32 gallons and spilling 50 gallons.

Hatfield and McCoy Burn with Hatred for Each Other