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Farmer Jones and Farmer Smith graze their cattle on the same field If there are 20 cows grazing in the field each cow produces $4000 of milk over its lifetime If there are more cows in the field

Farmer Jones and Farmer Smith graze their cattle on the same field. If there are 20 cows grazing in the field, each cow produces $4,000 of milk over its lifetime. If there are more cows in the field, then each cow can eat less grass, and its milk production falls. With 30 cows on the field, each produces $3,000 of milk; with 40 cows, each produces $2,000 of milk. Cows cost $1,000 apiece. a. Assume that Farmer Jones and Farmer Smith can each purchase either 10 or 20 cows, but that neither knows how many the other is buying when she makes her purchase. Calculate the payoffs of each outcome. b. What is the likely outcome of this game? What would be the best outcome? Explain. c. There used to be more common fields than there are today. Why? (For more discussion of this topic, reread Chapter 11.)

May 02 2020 View more View Less

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