Scenario: Consider a Trust Game Between an Employer and a Worker

question 24

Multiple Choice

Scenario: Consider a trust game between an employer and a worker. The employer will either trust or not trust the worker. If the employer trusts the worker, she will hire him and then the worker would either work faithfully for the employer, or shirk in his work. The diagram below shows their respective payoffs in different situations.

-Refer to the scenario above.The equilibrium of this game is ________.

• A) when the employer doesn't trust the worker
• B) when the employer trusts the worker, and the worker works faithfully
• C) when the employer trusts the worker, and the worker shirks
• D) nonexistent

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Definitions:

Resource Dependence

This concept outlines how external resources affect the behavior and strategies of organizations, underlining the dependency on external actors for resources needed to operate.

Open Systems

Organizations or entities that interact with their environment, exchanging resources, information, and influences.

Resource Dependence

Refers to a situation where organizations depend on external resources to operate, affecting their behavior and strategies in the marketplace.

Environmental Uncertainty

The degree of unpredictability in an organization's external environment that affects its decision-making and performance strategies.