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The Great Recession of 2007-2009 hit young people particularly hard, with long-lasting effects. The U.S. unemployment rate for 20-to 24-year-olds went from 8.5% in 2007 to 16% in 2009, stayed above 13% through 2012, but fell to 7% by the first half of 2018. As a result, more adult children moved back to live with their parents or asked for financial help than in previous years. The share of 25- to 34-year-olds living in multigenerational households rose from 11% in 1980 to 15% in 2016. A recent survey finds that 41% of parents provide financial support to their 23- to 28-year-old offspring. Indeed, parents give 10% of their income on average to their adult children. Mimi wants to support her son Jeff if he looks for work but not otherwise. Jeff (unlike most young people) wants to try to find a job only if his mother will not support his life of indolence. Mimi and Jeff's payoff matrix is illustrated in the figure to the right. If Jeff and Mimi choose actions simultaneously, what are the pure- or mixed-strategy Nash equilibria? Determine the pure-strategy Nash equilibrium for this game. O A. This game has no Nash equilibria. O B. The Nash equilibrium is for Mimi to support and Jeff to look for work. O C. The Nash equilibrium is for Mimi to not support and Jeff to look for work. O D. The Nash equilibrium is for Mimi to support and Jeff to loaf. O E. The Nash equilibrium is for Mimi to not support and Jeff to loaf. Determine the mixed-strategy Nash equilibrium for this game. The mixed-strategy Nash equilibrium is for Mimi to support with probability 0M = and for Jeff to look for work with probability 0,= (Enter your responses rounded to two decimal places.) Support Mimi No Support Jeff Look for Work 1 Loaf -1

The Great Recession of 2007-2009 hit young people particularly hard, with long-lasting effects. The U.S. unemployment rate for 20-to 24-year-olds went from 8.5% in 2007 to 16% in 2009, stayed above 13% through 2012, but fell to 7% by the first half of 2018. As a result, more adult children moved back to live with their parents or asked for financial help than in previous years. The share of 25- to 34-year-olds living in multigenerational households rose from 11% in 1980 to 15% in 2016. A recent survey finds that 41% of parents provide financial support to their 23- to 28-year-old offspring. Indeed, parents give 10% of their income on average to their adult children. Mimi wants to support her son Jeff if he looks for work but not otherwise. Jeff (unlike most young people) wants to try to find a job only if his mother will not support his life of indolence. Mimi and Jeff's payoff matrix is illustrated in the figure to the right. If Jeff and Mimi choose actions simultaneously, what are the pure- or mixed-strategy Nash equilibria? Determine the pure-strategy Nash equilibrium for this game. O A. This game has no Nash equilibria. O B. The Nash equilibrium is for Mimi to support and Jeff to look for work. O C. The Nash equilibrium is for Mimi to not support and Jeff to look for work. O D. The Nash equilibrium is for Mimi to support and Jeff to loaf. O E. The Nash equilibrium is for Mimi to not support and Jeff to loaf. Determine the mixed-strategy Nash equilibrium for this game. The mixed-strategy Nash equilibrium is for Mimi to support with probability 0M = and for Jeff to look for work with probability 0,= (Enter your responses rounded to two decimal places.) Support Mimi No Support Jeff Look for Work 1 Loaf -1

Economics: Private and Public Choice (MindTap Course List)
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
ChapterST8: Earnings Differences Between Men And Women
Section: Chapter Questions
Problem 1CQ
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The Great Recession of 2007-2009 hit young people particularly hard, with long-lasting effects. The U.S. unemployment rate for 20-to 24-year-olds went from 8.5% in 2007 to 16% in 2009, stayed above 13% through 2012, but fell to 7% by the first half of 2018. As a result, more adult children moved back to live with their parents or asked for financial help than in previous years. The share of 25- to 34-year-olds living in multigenerational households rose from 11% in 1980 to 15% in 2016. A recent survey finds that 41% of parents provide financial support to their 23- to 28-year-old offspring. Indeed, parents give 10% of their income on average to their adult children. Mimi wants to support her son Jeff if he looks for work but not otherwise. Jeff (unlike most young people) wants to try to find a job only if his mother will not support his life of indolence. Mimi and Jeff's payoff matrix is illustrated in the figure to the right. If Jeff and Mimi choose actions simultaneously, what are the pure- or mixed-strategy Nash equilibria? Determine the pure-strategy Nash equilibrium for this game. O A. This game has no Nash equilibria. O B. The Nash equilibrium is for Mimi to support and Jeff to look for work. O C. The Nash equilibrium is for Mimi to not support and Jeff to look for work. O D. The Nash equilibrium is for Mimi to support and Jeff to loaf. O E. The Nash equilibrium is for Mimi to not support and Jeff to loaf. Determine the mixed-strategy Nash equilibrium for this game. The mixed-strategy Nash equilibrium is for Mimi to support with probability 0M = and for Jeff to look for work with probability 0,= (Enter your responses rounded to two decimal places.) Support Mimi No Support Jeff Look for Work 1 Loaf -1
Transcribed Image Text:The Great Recession of 2007-2009 hit young people particularly hard, with long-lasting effects. The U.S. unemployment rate for 20-to 24-year-olds went from 8.5% in 2007 to 16% in 2009, stayed above 13% through 2012, but fell to 7% by the first half of 2018. As a result, more adult children moved back to live with their parents or asked for financial help than in previous years. The share of 25- to 34-year-olds living in multigenerational households rose from 11% in 1980 to 15% in 2016. A recent survey finds that 41% of parents provide financial support to their 23- to 28-year-old offspring. Indeed, parents give 10% of their income on average to their adult children. Mimi wants to support her son Jeff if he looks for work but not otherwise. Jeff (unlike most young people) wants to try to find a job only if his mother will not support his life of indolence. Mimi and Jeff's payoff matrix is illustrated in the figure to the right. If Jeff and Mimi choose actions simultaneously, what are the pure- or mixed-strategy Nash equilibria? Determine the pure-strategy Nash equilibrium for this game. O A. This game has no Nash equilibria. O B. The Nash equilibrium is for Mimi to support and Jeff to look for work. O C. The Nash equilibrium is for Mimi to not support and Jeff to look for work. O D. The Nash equilibrium is for Mimi to support and Jeff to loaf. O E. The Nash equilibrium is for Mimi to not support and Jeff to loaf. Determine the mixed-strategy Nash equilibrium for this game. The mixed-strategy Nash equilibrium is for Mimi to support with probability 0M = and for Jeff to look for work with probability 0,= (Enter your responses rounded to two decimal places.) Support Mimi No Support Jeff Look for Work 1 Loaf -1
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