Find the nash equilibrium of the game

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Assignment:

Suppose an amusement park is being built in a city with a population of 50. Voluntary contributions are being solicited to cover the cost. Each citizen is being asked to give $100. The more people contribute, the larger the park will be and the greater the benefit to each citizen. But it is not possible to keep out the noncontributors; they get their share of this benefit anyway. Suppose that when ther are n contributors in the population, where n can be any whole number between 0 and 50, the benefit to each citizen in monetary unit equivalents is n2 dollars.

(a) Suppose that initially no one is contributing. You are the mayor of the city. You would like everyone to contribute and can use persuasion on some people. Is it possible to persuade part of the population, but not all, so that everyone else decides to contribute voluntarily? Explain your reasoning with a payoff graph.

(b) Why does your answer differ from the answer to the Tutorial 9 exercise? How can you connect this difference to real-life observations?

Reference no: EM133843409

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