A young person entering the job market may be talented or untalented.Suppose that one-quarter of high school graduates are talented, and the rest untalented. A recent high school graduate, who knows whether or not he is talented, has the option of spending a year traveling overseas or enrolling at college (we will assume that he or she cannot do both) before applying for a job. An employer seeking to fill a job opening cannot know whether or not a job applicant is talented; all he knows is that the applicant either went to college or traveled overseas. The payoff an employer gets from hiring a worker depends solely on the talents of the hired worker (and not on his educational level), while the payoff to the youth depends on what he chose to do after high school, on his talents (because talented students enjoy their studies at college more than untalented students), and on whether or not he gets a job. These payoffs are described in the following tables (where the employer is the row player and the youth is the column player, so that a payoff vector of (x, y) represents a payoff of x to the employer and y to the youth). TravelStudyHire(0,6)(0,2)Do’nt Hire(3,3)(3,-3) TravelStudyHire(8,6)(8,4)Do’nt Hire(3,3)(3,1) List the pure strategies of the two players.Find two Bayesian equilibria in pure strategies.Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.

A game consists of players, strategies and payoff. A strategy is a set of possibilities that a…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A young person entering the job market may be talented or untalented.Suppose that one-quarter of high school graduates are talented, and the rest untalented. A recent high school graduate, who knows whether or not he is talented, has the option of spending a year traveling overseas or enrolling at college (we will assume that he or she cannot do both) before applying for a job. An employer seeking to fill a job opening cannot know whether or not a job applicant is talented; all he knows is that the applicant either went to college or traveled overseas. The payoff an employer gets from hiring a worker depends solely on the talents of the hired worker (and not on his educational level), while the payoff to the youth depends on what he chose to do after high school, on his talents (because talented students enjoy their studies at college more than untalented students), and on whether or not he gets a job. These payoffs are described in the following tables (where the employer is the row player and the youth is the column player, so that a payoff vector of (x, y) represents a payoff of x to the employer and y to the youth).

	Travel	Study
Hire	(0,6)	(0,2)
Do’nt Hire	(3,3)	(3,-3)

	Travel	Study
Hire	(8,6)	(8,4)
Do’nt Hire	(3,3)	(3,1)

List the pure strategies of the two players.
Find two Bayesian equilibria in pure strategies.

Note:-

Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
You will get up vote for sure.

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