Suppose That You Are a Manager

question 115

Multiple Choice

Suppose that you are a manager. You are considering whether or not to monitor employees with the payoffs in the normal-form game shown below. Which of the following pairs of strategies constitutes a Nash equilibrium?

• A) Manager monitors and worker works.
• B) Manager does not monitor and worker works.
• C) Manager monitors and worker shirks.
• D) None of the answers is correct.

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Definitions:

Shame

A painful feeling arising from the consciousness of something dishonorable or improper done by oneself or another.

Pride

A feeling of satisfaction and self-respect that comes from one's achievements, qualities, or possessions, which can also reflect a community's esteem.

Cortisol

A steroid hormone released by the adrenal glands in response to stress or low blood-glucose concentration.