Question

1.You and 9 of your wealthy friends attend a political fundraiser. You each can donate up to $1,000,000 to the candidate. Let M be the sum of all 10 donations; it is convenient to write M=Mi+M-i, where Mi is the donation by person i, and M-i is the sum of the donations by the other people. Suppose Adelsoros wants to have as much money as possible be donated. He will still offer to donate $1,000,000 as long as the sum from the first 10 donors is at least X.

How high can X be so that there is still a Nash equilibrium in which everyone donates? Explain.

Answer 1