Same as Problem 14, except now the payoff values of each person are as follows:

a. If Smith and Jones are payoff maximizers and make their decisions individually, what will they do?
b. If Smith and Jones can make binding agreements with each other, what will they do?
c. How do your answers differ from Problem 14 andwhy?

Transcribed Image Text:

Smith Early Jones: 30 Smith: 30 Late Jones: 50 Smith: 20 Early Jones Jones 20 Jones: 10 Smith: 60 Late Smith: 10