USA/Fiji No-Tax Tax No-Tax (10000,-99989) (10100,-89990) Tax (9900,-9989) (10000,10) a. Only the US imposes a tax: Tu = 2, TF = 0 Profits(USA, Fiji) = 10 + 11 = 21 Total Emissions (USA, Fiji) = 0 + 100 = 100 b. Only Fiji imposes a tax: TF = 2, Tu = 0 Profits(USA, Fiji) = 11 + 10 = 21 Total Emissions (USA, Fiji) = 900 + 0 = 900 c. Both countries impose a tax: T₁ = TF = 2 Profits(USA, Fiji) = 10 + 10 = 20 Total Emissions(USA, Fiji) = 0 +0=0 d. Neither country imposes a tax: T₁ = TƑ = = 0 Profits(USA, Fiji) = 11 + 11 = 22 Total Emissions (USA, Fiji) = 900 + 100 = 1000 1. What is the Pure Strategy Nash Equilibrium of this game? What is the equilibrium amount of global emissions?
USA/Fiji No-Tax Tax No-Tax (10000,-99989) (10100,-89990) Tax (9900,-9989) (10000,10) a. Only the US imposes a tax: Tu = 2, TF = 0 Profits(USA, Fiji) = 10 + 11 = 21 Total Emissions (USA, Fiji) = 0 + 100 = 100 b. Only Fiji imposes a tax: TF = 2, Tu = 0 Profits(USA, Fiji) = 11 + 10 = 21 Total Emissions (USA, Fiji) = 900 + 0 = 900 c. Both countries impose a tax: T₁ = TF = 2 Profits(USA, Fiji) = 10 + 10 = 20 Total Emissions(USA, Fiji) = 0 +0=0 d. Neither country imposes a tax: T₁ = TƑ = = 0 Profits(USA, Fiji) = 11 + 11 = 22 Total Emissions (USA, Fiji) = 900 + 100 = 1000 1. What is the Pure Strategy Nash Equilibrium of this game? What is the equilibrium amount of global emissions?
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter14: Environmental Economics
Section14.2: Achieving Environmental Efficiency
Problem 2.2GE
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