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5. Two workers compete for a prize worth v. Worker 1' has ability 7L: and expends effort x.- in pursuit of the prize. 1 A1961
5. Two workers compete for a prize worth v. Worker 1' has ability 7L: and expends effort x.- in pursuit of the prize. 1 A1961 . , . . . . . . 1 (1] Suppose that worker 1 s probability of w1nn1ng the prize 13 4 + 2 (klxkzxz) Calculate the equilibrium effort levels. (ii) Find the equilibrium effort levels when 7L1 = 1.2 = 40. (iii) Now suppose the ability levels are 7L1 = 40+d and 3.2 = 40-d, where 0
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