In a public goods game, suppose there are four players, each has $20. Each player...
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Accounting
In a public goods game, suppose there are four players, each has $20. Each player decides to contribute how much out of $20 into the public account (from zero to 20, inclusive). The money that is not contributed to the public account will stay at one's private account. The money that is contributed to the public account will be doubled and split equally among the four players. For example, if A contributes $5 to the public account, A will have $15 in her/his private account. The $5 in the public account will become $10 and each player including A will receive $2.5. If another player, say B, contributes $10 to the public account, all players including A will receive $5. If all players are fully rational, how much will each player contribute to the public account i.e. the theoretical equilibrium? How much will each player earn? What is the total money earned (add the four players payoff up)? What is the total-money-maximized contribution for each player? In this case, how much will each player earn? What is the total money earned? Can you suggest some ways to move the outcome to total-money-maximized contribution
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