Economic and Game Theory
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"Inside every small problem is a large problem struggling to get out." | |||||
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I have troubles solving the following problem: There are a taxpayer and an inspector. The taxpayer receives income y, drawn from some distribution and decides her tax declaration size - d. The inspector receives taxpayer's declaration and decides whether to audit or not. Doing audit costs - c. If the inspector does audit, she charges taxpayer with penalty - f on the difference between his true income and the declared one. Could you please provide some advice on how to find NE in this game? [Manage messages] |