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An employer and a worker, if both are honest and work hard, together produce $200,000 a year, of which the employer gets $50,000 and the worker $150,000. If either one is dishonest and lazy, they break up, the employer employs someone else and the worker gets another employer. The following shows what they might earn if they broke up. In which case is it likely that both the employer and the worker will be honest and hard working?
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