In the town of Torrelodones, each of the N 2 inhabitants has $100. They are told that they can all voluntarily contribute to a fund that will be evenly divided among all residents. If $F are contributed to the fund, the local K-Mart will match the private contributions so that the total amount to be divided is $2F. That is, each resident will get back a payment of $ when the fund is divided. If the people in town care only about their own net incomes, in Nash equilibrium, how much will each person contribute to the fund?
A) $0
B) $10
C) $20
D) $50
E) $100

Question

In the town of Torrelodones, each of the N > 2 inhabitants has $100. They are told that they can all voluntarily contribute to a fund that will be evenly divided among all residents. If $F are contributed to the fund, the local K-Mart will match the private contributions so that the total amount to be divided is $2F. That is, each resident will get back a payment of $  when the fund is divided. If the people in town care only about their own net incomes, in Nash equilibrium, how much will each person contribute to the fund?
A) $0 
B) $10 
C) $20 
D) $50 
E) $100

Quizplus · Accepted Answer

The Answer of In the town of Torrelodones, each of the N > 2 inhabitants has $100. They are told that they can all voluntarily contribute to a fund that will be evenly divided among all residents. If $F are contributed to the fund, the local K-Mart will match the private contributions so that the total amount to be divided is $2F. That is, each resident will get back a payment of $  when the fund is divided. If the people in town care only about their own net incomes, in Nash equilibrium, how much will each person contribute to the fund?
A) $0 
B) $10 
C) $20 
D) $50 
E) $100

In the Town of Torrelodones, Each of the N >