Playing for Charity
What if she says “I’ll pay some extra for the tails-tails case, but the extra goes to charity”. How much can she pay extra and still break even?
parameter t(you,her) /tails.tails 1/;
variable r 'charity tax rate from T-T';
fHer2(her).. sum{you, x(you) *[herCost(you,her)+t(you,her)*r]} - v =g= 0;
model m2 / fYou.x, sumYou.u,
solve m2 max r using mpec;
Solution: r = 1/3 extra, but only your strategy changes!