Find the mixed strategy nash equilibria nbspin other words

Reference no: EM13392363

Consider the employee-employer relationship - an employee would like to be paid but also gets some benefit by shirking his duties. An employer would like the employee to work diligently but monitoring the employee is costly. This dynamic can be modeled using a game. The payoffs of the "monitoring game" are given below:

	Business
	Monitor	Don't Monitor
Shirk Employee Work	0, -20	150, -100
	100, 80	100, 100

For the employer, this assumes that the worker receives 100 in wages, produces 200 worth of goods if the employee works and monitoring costs 20. From the employee's point of view, the net benefit to the employee from working and getting paid is 100. If the worker can shirk and get paid the worker is better off, however the employee is fired if the worker shirks and the employer monitors and thus is worse off.

Show that there are no pure strategy Nash equilibria in this game.
What is the mixed strategy Nash equilibria? In other words, what is the probability that the employer will monitor? What is the probability that the employee will shirk? See the lecture for details on how to calculate the probabilities.
Briefly interpret the Nash equilibria in words.

Reference no: EM13392363

Questions Cloud

Assume hotel raised its price from 30 to 3050 compute : suppose the hotel in the lecture example raised its price from 30 to 30.50. with the new price the hotel expects 96

Analyze the circumstances that resulted in the merger or : examine the circumstances that resulted in the merger or acquisition for the selected company. speculate on two 2

How can cultural differences among audiences affect how : 1.how can cultural differences among audiences affect how public relations messages are interpreted and received? why

What are the main components of your own companys strategic : what are the major components of your own companys strategic management process? what are some key facts of your

Find the mixed strategy nash equilibria nbspin other words : consider the employee-employer relationship - an employee would like to be paid but also gets some benefit by

Discuss the marketing channel you have selected for the : for this course you will be developing a marketing plan for a new product or service. each week you will develop a

Explain how does your company make sure that all employees : how does your company ensure that all employees are meeting their ethics and corporate responsbility? how does it focus

Describe the target country the country cannot be the : utilize the compiled data from the week two assignment to assist you in the development of your final paper. submit an

What happens to other countrys payoff if it decides to : suppose two entities are considering collusion - to make things legal consider a situation similar to opec except

User Account

All Pages