You and a classmate are assigned a project on which you will receive one combined grade. You each want to receive a good grade, but you also want to avoid hard work. In particular, here is the situation: • If both of you work hard, you both get an A, which gives each of you 25 units of happiness. • If only one of you works hard, you both get a B, which gives each of you 15 units of happiness. • If neither of you works hard, you both get a D, which gives each of you 5 units of happiness. • Working hard costs 15 units of happiness. Complete the following payoff matrix given the previous information. In each cell, your classmate's payoff is on the left and yours is on the right. Your Decision Work Shirk Classmate's Decision Work , , Shirk , , The likely outcome is that your classmate and you . If you get this classmate as your partner on a series of projects throughout the year, rather than only once, you are likely to engage in cooperation. Another classmate cares more about good grades: He gets 30 units of happiness for a B and 50 units of happiness for an A. Complete the following payoff matrix, assuming you have this classmate as a partner. Your Decision Work Shirk Classmate's Decision Work , , Shirk , , The likely outcome in this case is that your classmate and you . You would prefer the classmate as a partner, and he want you as a partner.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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You and a classmate are assigned a project on which you will receive one combined grade. You each want to receive a good grade, but you also want to avoid hard work. In particular, here is the situation:

•	If both of you work hard, you both get an A, which gives each of you 25 units of happiness.
•	If only one of you works hard, you both get a B, which gives each of you 15 units of happiness.
•	If neither of you works hard, you both get a D, which gives each of you 5 units of happiness.
•	Working hard costs 15 units of happiness.

Complete the following payoff matrix given the previous information. In each cell, your classmate's payoff is on the left and yours is on the right.

Your Decision

Work

Shirk

Classmate's Decision

Work

Shirk

The likely outcome is that your classmate and you .

If you get this classmate as your partner on a series of projects throughout the year, rather than only once, you are likely to engage in cooperation.

Another classmate cares more about good grades: He gets 30 units of happiness for a B and 50 units of happiness for an A.

Complete the following payoff matrix, assuming you have this classmate as a partner.

	Your Decision
Work	Shirk
Classmate's Decision	Work	,	,
Shirk	,	, The likely outcome in this case is that your classmate and you . You would prefer the classmate as a partner, and he want you as a partner.

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