Fixed amount toward the provision of public good

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Reference no: EM131392107

Three people choose whether to contribute a fixed amount toward the provision of a public good. The good is provided if and only if at least two of them contribute. If it is not provided, contributions are not refunded. Each person ranks outcomes from the best to worst as follows:

i) Any outcome in which the good is provided and she does not contribute

ii) Any outcome in which the good is provided and she contributes

iii) Any outcome in which the good is not provided and she does not contribute

iv) Any outcome in which the good is not provided and she contributes

Formulate this situation as a strategic game. Represent the game in the form of the payoff matrices and find any and all Nash Equilibria. Show your logic.

Reference no: EM131392107

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