Ec101F10HW2_101109

Ec101F10HW2_101109 - Economics 101, UCLA Fall 2010 Jernej...

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Economics 101, UCLA Fall 2010 Jernej Copic Homework 2, 11/10/2010; Due Tue 11/16/2010, 1230pm. This homework refers somewhat to what is called a second-price auction. Re- member that you should appropriately cite any sources you end up using. On an island called CocoRepo, there are N + 1 inhabitants, and one coconut palm. The coconut palm is the only basic resource, and hence the only source of food for the inhabitants. The problem is that only the inhabitant i = 1, No1, knows how to climb the palm, and since that is a tiring activity, he can only do it once a day, and bring one coconut from the palm. The island economy has money (US), as occasionally a stray boat wanders into the lonesome harbor in the blue CocoRepo’s lagoon. None of the inhabitants is poor in the sense that they all have plenty of money. In the following problems, it will be very good idea to proceed by thinking first of just a few inhabitants, write down their payoffs for different outcomes, and then consider the games. In parts 1-3, consider only one day in isolation. 1. Suppose that the disutility of climbing the palm for No1 is 0 in money equiva- lents. The other N inhabitants each value the coconut at some number v i
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This note was uploaded on 09/05/2011 for the course ECON 101 taught by Professor Buddin during the Fall '08 term at UCLA.

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Ec101F10HW2_101109 - Economics 101, UCLA Fall 2010 Jernej...

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