Consider a Game in Which Each of Three Men Is

question 66

Essay

Consider a game in which each of three men is given $20. All three must secretly decide whether they will contribute any part of their $20 to a trust fund. At the end of the game, each player will receive 40% of the total money contributed to the trust fund, in addition to any of the remaining $20 that he is holding.
a. If all three players contribute $20 to the trust fund, how much will each player earn at the end of the game?
b. If all of the players are altruistic, how much money will each player earn at the end of the game?
c. Suppose that the first two players contributed $20 each to the trust fund. What should a rationally self-interested player contribute?

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Definitions:

Intelligence Tests

Standardized exams designed to measure human intelligence capabilities.

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Standardized tests designed to measure an individual's potential to perform certain tasks or learn particular skills.

Ability to Learn

The capacity of individuals to acquire knowledge, understand through experience, practice, study, or instruction, and improve skills over time.

WAIS

The Wechsler Adult Intelligence Scale, a commonly used test designed to measure human intelligence through various cognitive tasks.