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

b. If Smith and Jones can make binding agreements with each other, what will they do?

PROBLEMS 565 Smith Early Late Early Jones: 30 Jones: 50 Smith: 30 Smith: 20 Jones Late Jones: 20 Jones: 10 Smith: 50 Smith: 10 Smith Early Late Early Jones: 30 Jones: 50 Smith: 30 Smith: 20 Jones Late Jones: 20 Jones: 10 Smith: 60 Smith: 10 Smith Arlington Bexley Arlington Jones: 0 Jones: 500 Smith: 800 Smith: 900 Jones Bexley Jones: 800 Jones: 0 Smith: 800 Smith: 900

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 and why?