Microeconomic Theory ( 501 b ) Problem Set 7 . Bayesian Games and Adverse Selection
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چکیده
2. We now consider a variation of the coordination game we discussed in class. A large, that is a continuum, population with unit mass (so you can index player i 2 [0; 1]), must choose an action, "invest" or "not invest". There is a cost y to investing and assume 0 < y < 1. There is a bene t 1 of investing (investment "succeeds") if at least proportion 1 of the population invests (i.e., at most do not invest), and as before state 2 R represents "fundamentals" of the economy.
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