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. Employer High Offer Low Offer Employee Accept Employee: 100 Employer A: 50 Employee Reject Employee: 0 Employer A: 0 Employee Accept Employee: 50 Employer A: 100 Employee Reject Employee: 0 Employer A: 0 Assume this is a sequential game. If employer A offers a low salary, you, as the employee, are best served by the offer. In this case, you would earn a payoff of , and employer A would earn a payoff of . Alternatively, if employer A offers a high salary, you are best served by the offer. In this case, you would earn a payoff of , and employer A would earn a payoff of . With this information, employer A will choose to make a offer, since it will yield a higher payoff for him, based on what you (the employee) will subsequently choose. Suppose you have a competing job