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Post Closed as "off topic" by Yemon Choi, S. Carnahan♦
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A doubt about Game Theory(Gibbons, Game Theory for Applied Economists) |
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When I read the book write by Robert Gibbons . In the first chapter, they discussed "The Problem of the Commons" I can't understand why $v^{'} \left(g_i + g_{-i}^{*}\right)$ (page 27) represent the damage of the price of the original price of the sheep. I think the damage of the price of the original price should be: $v \left(G\right) - v\left(g_i + g_{-i}^{*}\right)$ where $G$ means the original number of sheep . the price function $V$ has the relationship with the number of the sheep. Also in the page 27, the author say the first order condition for this optimization problem is $v \left(g_i + g_{-i}^{*}\right) + g_iv^{'} \left(g_i + g_{-i}^{*}\right) -c =0$ I can't understand the author want to say......Perhaps he means we should find $g_i$ as bigger as possible until we can't earn more money when we add more sheep. |
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