Find the nash equilibrium levels of g and s

Reference no: EM133380683

Question: Gilly and Sam are assigned to do a joint paper. Let G denote the time that Gilly spends writing and let S denote the time that Sam spends writing. The grade is determined by the amount of time spent by both. They get utility from a higher grade, but also get utility from leisure. Speci?cally, the utility functions are: UGilly = ln(G+S) + ln(18-G) USam = ln(S+G) + ln(18-S).

1. Find the Nash equilibrium levels of G and S if they move simultaneously.

2. What levels of G and S would have maximized their total utility, TU=UGilly+USam ?

3. Now assume that Gilly and Sam decide to move sequentially. Sam wins the coin toss and decides his time S ?rst. After observing S, Gilly then decides her time G. Find the equilibrium levels of S and G in the Stackelberg equilibrium.

Reference no: EM133380683

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