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A shoe salesman working on commission must decide whether to work hard or shirk. Working hard would increase the probability of a sale from 10%
A shoe salesman working on commission must decide whether to work hard or shirk. Working hard would increase the probability of a sale from 10% to 60% but the effort would cost him $5. If the commission on a typical pair of shoes was $12, would he decide to work hard? Yes because his expected payoff is higher than what it costs him in effort O Yes because his expected payoff is higher than zero O No, because it costs him more than his expected payoff O None of the above
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