Strategic shirking Leo just got a job at a consulting firm. He is happy that he's got a job, but does not really feel like working too hard. His supervisor Argus is well aware of that fact. Argus can either come in to control what Leo is doing or enjoy another coffee break. Leo on the other hand can either shirk openly, pretend to work, or work for real. Leo likes to shirk, hates to pretend to work, and is okay with working, if he does not get controlled. Argus likes to drink coffee, but relies on Leo working. If he finds out Leo is shirking, Argus will fire Leo. When Leo pretends to work, Argus cannot fire him, which drives him mad, too. Find the Nash equilibrium in pure strategies for the game depicted in the following payoff matrix (where Leo is on the left and Argus on top, and their payoffs are on the left/right): Leo Shirk Pretend Work Argus Control Coffee -5/2 7/0 -3/-4 2/0 -1/1 0/0
Strategic shirking Leo just got a job at a consulting firm. He is happy that he's got a job, but does not really feel like working too hard. His supervisor Argus is well aware of that fact. Argus can either come in to control what Leo is doing or enjoy another coffee break. Leo on the other hand can either shirk openly, pretend to work, or work for real. Leo likes to shirk, hates to pretend to work, and is okay with working, if he does not get controlled. Argus likes to drink coffee, but relies on Leo working. If he finds out Leo is shirking, Argus will fire Leo. When Leo pretends to work, Argus cannot fire him, which drives him mad, too. Find the Nash equilibrium in pure strategies for the game depicted in the following payoff matrix (where Leo is on the left and Argus on top, and their payoffs are on the left/right): Leo Shirk Pretend Work Argus Control Coffee -5/2 7/0 -3/-4 2/0 -1/1 0/0
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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