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After graduation, you enter salary negotiations for your first job. Suppose the potential employer (employer A) has two choices: to offer you a high salary
After graduation, you enter salary negotiations for your first job. Suppose the potential employer (employer A) has two choices: to offer you a high salary or to offer you a low salary. You may then accept or reject whatever offer is made. The payoffs, as well as the decision tree, are depicted in the following figure. Employee Accept Employee: 97 Employer A: 59 High Offer Employee Reject Employee: 0 Employer A: 0 Employer Employee Accept Employee: 59 Employer A: 97 Low Offer Employee Reject Employee: 0 Employer A: 0Employee Accept Employee: 97 Employer A: 59 High Offer Employee Reject Employer A: 0 Employee: 78 Employer Employee Accept Employee: 59 Employer A: 97 Low Offer Employee Reject Employee: 78 Employer A: 0 True or False: With this competing job offer, your threat to reject employer A's offer, if it is low, is now credible. O True O False
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