Solved

A Small Community Has 10 People, Each of Whom Has

Question 1

Multiple Choice

A small community has 10 people, each of whom has a wealth of $5,000.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 b times the total amount of money contributed by individuals in the community.


A) This game has a dominant strategy equilibrium in which nobody contributes anything for public entertainment.
B) If 10b > 1, everybody is better off if all contribute to the public entertainment fund than if nobody contributes, but if 10b <1, everybody is better off if nobody contributes than if all contribute.
C) If 10b > 1, there is a dominant strategy equilibrium in which everybody contributes.
D) Everybody is worse off if all contribute than if nobody contributes if b> 1, but if b < 1, everybody is better off if nobody contributes.
E) In order for there to be a dominant strategy equilibrium in which all contribute, it must be that b > 10.

Correct Answer:

verifed

Verified

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents