What level of expenditure on the public good maximizes the


Let each dollar spent on a private good give you 10 units of utility but each dollar spent on a public good give you and your two neighbors 5 units each. If you have a fixed income of $10, how much would you spend on the public good? What is the value of the total purchases at the Nash equilibrium if your neighbors also have $10 each? What level of expenditure on the public good maximizes the total level of utility?

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Econometrics: What level of expenditure on the public good maximizes the
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