At a company, 20 employees are making contributions for a retirement gift. Each of the 20 employees is choosing how many dollars to contribute from the interval [0,10]. The manager of these 20 employees announces that she will contribute d dollars for every dollar that an employee contributes. The payoff to employee i who makes contribution of x; dollars is b;(1+ d)x; - xị, where b; > 0. Assume that d = 2, b; = 0.25 for i = 1,2, ..., 10, and b; = 0.5 for i = 11, 12, . .. , 20 What is the best contribution level of any employee i for i = 1,2, . .., 10.

At a company, 20 employees are making contributions for a retirement gift. Each of the 20 employees is choosing how many dollars to contribute from the interval [0,10]. The manager of these 20 employees announces that she will contribute d dollars for every dollar that an employee contributes. The payoff to employee i who makes contribution of x; dollars is b;(1+ d)x; - xị, where b; > 0. Assume that d = 2, b; = 0.25 for i = 1,2, ..., 10, and b; = 0.5 for i = 11, 12, . .. , 20 What is the best contribution level of any employee i for i = 1,2, . .., 10.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.7P

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