Table 12.3 Payoffs to Villager 1 and Villager 2 in a Road

question 10

Multiple Choice

Table 12.3
Payoffs to Villager 1 and Villager 2 in a Road Maintenance Game
(R is the benefits of a maintained road and the project requires a total of L hours of labor,therefore R-L/2>0 is the net utility payoff)

-According to table 12.3,if it is an assurance game,which of the following statement is true?

• A) The Nash equilibrium outcome is Villager 1 chooses shirking,Villager 2 chooses shirking.
• B) Villager 1 will choose to participate if she expected Villager 2 to participate and Villager 2 will choose to participate if she expected Villager 1 to participate.
• C) When both villagers cooperate in maintaining the road by participating,they both are better off.
• D) All of the above.

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