Suppose an amusement park is being built in a city with a population of 100. Voluntary contributions are being solicited to cover the cost. Each citizen is being asked to give $100. The more people...


Suppose an amusement park is being built in a city with a population of 100. 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 there are n contributors in the population, where n can be any whole number between 0 and 100, 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. What is the minimum number whom you need to persuade before everyone else will join in voluntarily?


(b) Find the Nash equilibria of the game where each citizen is deciding whether to contribute.




May 26, 2022
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