This preview shows page 1. Sign up to view the full content.
Unformatted text preview: things, 9 - a, and an interaction term combining both of these terms, (9-a)(a+b). Thus her payoff, x = a + b + 9 a + (9-a)(a+b) = b + 9 +(9-a)(a+b). Similarly, Bobs payoff is given by y = a + b + 12 b + (12-b)(a+b) = a + 12 +(12-b)(a+b). Find the Nash Equilibrium contributions. Are these contribution levels Pareto Efficient? If not, find the Pareto Efficient levels of contributions....
View Full Document
- Spring '07