(Solved): Kyoko and Rina are considering contributing toward the creation of a building mural. Each can choos ...

Kyoko and Rina are considering contributing toward the creation of a building mural. Each can choose whether to contribute $$\$400$$ to the building mural or to keep that $$\$400$$ for a pool table. Since a building mural is a public good, both kyoko and Rina will benefit from any contributions made by the other person. Specifically, every doliar that either one of them contributes will bring each of them $$\$0.80$$ of benefit. For example, If both Kyoko and Rina choose to contribute, then a total of $$\$800$$ would be contributed to the building mural. So, Kyoko and Rina would each receive $$\$640$$ of benefit from the building mural, and their combined benefit would be $$\$1,280$$. This is shown in the upper left cell of the first table. Since a pool table is a private good, if Kyoko chooses to spend $$\$400$$ on a pool table, kyoko would get $$\$400$$ of benefit from the pool table and Rina wouldn't receive any benefit from Kyoko's choice. If Kyoko still spends $$\$400$$ on a pool table and Rina chooses to contribute $$\$400$$ to the building mural, Kyoko would still recelve the $$\$320$$ of benefit from Rina's generosity. In other words, if kyoko decides to keep the s400 for a pool table and Rina decides to contribute the $$\$400$$ to the public project, then Kyoko would receive a total benefit of $$\$400+\$320=\$720$$, Rina would receive a total benefit of \$320, and their combined benefit would be $$\$1,040$$. This is shown in the lower ieft cell of the first table. Complete the following table, which shows the combined benents of Kyoko and Rina as previousiy described. Of the four cells of the table, which gives the greatest combined benefits to Kyoko and Rina? When neither kyoko nor Rina contributes to the bullding mural When both Kyoko and Rina contribute to the buliding mural When Kyoko contributes to the building mural and Rina doesn't, or vice versa Now, consider the incentive facing Kyoko individually. The following table looks similar to the previous one, but this time, it is partialiy completed with the individuat benefit data for Kyoko. As shown previously, if both Kyoko and Rina contribute to a public good, Kyoko receives a benefit of $$\$640$$. On the other hand if Rina contributes to the building mural and Kyoko does not, Kyoko recelves a benefit of $$\$720$$. Complete the right-hand columin of the following table, which shows the individuaf benenits of Kyoko. Hint: You are not required to consider the benefit of Rina. If Rina decides to contribute to the building mural, Kvoko would maximixe her benefit by choosing the other hand, It Rina decides not to contritute to the building mural, Kyoko would maximize her benefit by choosing to the building mural. On building mural. Thest results illustrate.