Consider a Game in Which Each of Three Men Is

Essay

Consider a game in which each of three men is given $20. All three must secretly decide whether they will contribute any part of their $20 to a trust fund. At the end of the game, each player will receive 40% of the total money contributed to the trust fund, in addition to any of the remaining $20 that he is holding.
a. If all three players contribute $20 to the trust fund, how much will each player earn at the end of the game?
b. If all of the players are altruistic, how much money will each player earn at the end of the game?
c. Suppose that the first two players contributed $20 each to the trust fund. What should a rationally self-interested player contribute?