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6. Individual Problems 19-6 1I'ou need to hire some newI employees to staFf your sIartup venture. You knowI that potential employees are distributed throughout the
6. Individual Problems 19-6 1I'ou need to hire some newI employees to staFf your sIartup venture. You knowI that potential employees are distributed throughout the population as Follows, but you can't distinguish among them: Employee Value Probability 565,000 0.25 $54,000 0. 25 $193,000 CI. 25 $122.!INIIIZh U. 25 The expected value of hiring one employee is . Suppose you set the salary of the position equal to the expected value of an employee. Assume that employees will not work fora salary belowI their employee value. The expected value of an employee who would apply For the position, at this salary, is . Given this adverse selection, your most reasonable salaryr o'i'Fer (that ensures you do not lose money} is V
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