Suppose, there are two players in a game of continuous actions (similar to the "Tragedy of the Commons" game). They both

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Suppose There Are Two Players In A Game Of Continuous Actions Similar To The Tragedy Of The Commons Game They Both 1 (96.03 KiB) Viewed 27 times

Suppose, there are two players in a game of continuous actions (similar to the "Tragedy of the Commons" game). They both aim to maximize x. Marginal benefit (MB) functions of the players are as below: . = Player 1: MB1 = 136 - 4x1 - X2 Player 2: MB2 = 136 - X1 - 4x2 = The marginal cost (MC) of x for each player is 20. (Hint: each player will maximise their payoff when MB=MC). The best response function for Player 1 is X1 = = -X2/ The best response function for Player 2 is X2 = -X1/ In the Nash Equilibrium, each player should select units of x.