final_practice - University of California Davis Department...

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University of California, Davis -- Department of Economics ECON 122 : GAME THEORY Professor Giacomo Bonanno PRACTICE FOR FINAL EXAM Answer all questions. Explain your answers. 1. Consider the following game. There are two players. Each has to decide whether or not to contribute to public television. If neither of them contributes, then there is no public television and each gets a payoff of zero. If a player decides to contribute, she gives her credit card number to the potential provider of public television. The provider then proceeds as follows: if both players supplied their credit card numbers, each credit card is charged $2 and the broadcasting takes place; if only one player provided her credit card number, then the card is charged $3 and the broadcasting takes place. Public television is a public good, that is, once it is provided everybody can enjoy it, whether or not she contributed to it. Each player derives a benefit from being able to watch public television equivalent to getting $4. The players make their decisions independently of each other (i.e. with no information about what the other player chose).
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