N players each receive an endowment and decide how much to contribute to a common pool.
The pool is multiplied and redistributed equally. Free-riders benefit without contributing,
creating a tension between individual and group interests.
About the Public Goods Game
The Dilemma: Each player receives an endowment (e.g., 10 coins). They simultaneously decide how much to contribute to a public pool.
Multiplication: The total pool is multiplied (e.g., by 2.0) and then divided equally among all players.
The Paradox: Individually, it's rational to contribute nothing (free-ride) since you keep your endowment plus your share of others' contributions. But if everyone free-rides, the total payoff is minimized.
Example: With 5 players, endowment 10, multiplier 2.0:
• If everyone contributes 10: Pool = 50 × 2 = 100. Each gets 20. Net gain: +10 each.
• If you contribute 0 and others contribute 10: Pool = 40 × 2 = 80. Each gets 16. You net: 10 + 16 = 26.
• If everyone contributes 0: Pool = 0. Each keeps 10. No gain.
This game models real-world scenarios like taxation, environmental protection, and public infrastructure funding.