Public goods

Question 1

Nash equilibrium is pareto dominant if:

Answer 1

It gives a higher payoff to everyone than every other nash equilibrium

Question 2

Nash equilibrium is risk dominant if:

Answer 2

Each person is choosing the strategy that would maximise their payoff if they cannot predict what others will do

Question 3

What is the basis of a threshold public good game?

Answer 3

A good will be provided for the benefit of everyone if and only people contribute enough to exceed some threshold

Question 4

What are some examples of a threshold public good game?

Answer 4

• Members of a church need to raise $100,000 to fix the roof
• Flatmates have to put in combined hours of work to clean the flat

Question 5

In a threshold public good game, there’s a conflict of interest because:

Answer 5

People need to decide how much each person should contribute

Question 6

What are two things that might help people coordinate better in a TPGG?

Answer 6

• If possible, we can give refunds if contributions fall short
• Give a rebate if contributions exceed the threshold

Question 7

What does the threshold success rate of a TPGG depend on?

Answer 7

• Sequential choice (see contributions as they rise)

- Refund

Question 8

What is a utilization rebate?

Answer 8

Excess funding is used for extra benefit

Question 9

What is a proportional rebate?

Answer 9

When excess funding is returned in proportion to donations