Question

So, for the first question, the two Best Response functions I got are:

2. Two friends (person I and person 2) are going out to dinner. The gross payoff each person gets from the dinner is an increasing function of pi, which denotes the total amount that person is dinner is worth (Think of pi as the sum of the prices of the individual's appetizer, entrée, dessert, and drinks). Suppose that, for each persorn, this gross payoff is given by v0p where or 2. A person's net payoff is defined as the gross payoff less the amount the individual spends of her own money on the dinner. a. Suppose that person and 2 decide to share the total cost of the dinner (note that the total cost of the dinner is p2). Let t denote person l's share of the total cost of the dinner and (1-t) denote Person 2's share (where 0 </). Assuming that each individual seeks to maximize her net payoff, solve for each individual's best response function and plot it in a best response diagram with pi on the horizontal axis and p2 on the vertical axis. How much will each individual's dinner be worth at the Nash equilibrium (i.e. in the Nash equilibrium, what will be the total price of each individual's dinner as a function of t)?

BR₁=25/t² || BR₂=25/(1-t)²

For the second question ("How much will each individual's dinner be worth at the Nash eq^bm?"), I got that P₁=BR₁ and P₂=BR₂ (i.e the prices were the Best Reponse functions).

Is this correct? I'm just confused as I'm not sure why the question would contain two parts which have the same answer. Are the Nash Equilibrium prices always the same as the Best Response Functions?

Answer 1

Angwer

max P unestm BRL raph 8R

and sCH Corne