Alice and Bob work on a joint project. The project can either be difficult or easy, which Bob observes before making his choice. Alice, however, only knows that the project is difficult with 0.5 probability and is easy with 0.5 probability. Alice and Bob simultaneously decide whether to exert high effort or not. The cost of low effort is zero and the cost of high effort is 1 for each player. The utility of each player depends on whether the project is successful or not: if the project is successful, each player gets a benefit of 2 before subtracting his/her cost of effort. If the project is unsuccessful, each player gets zero before subtracting his/her cost of effort. If the project is difficult, the project is successful if and only if both agents exert high effort (in other words, it is unsuccessful if at least one agent exerts low effort). If the project is easy, the project is successful if at least one agent exerts high effort (in other words, it is unsuccessful if and only if both agents exert low effort).

(a) Model this problem as a Bayesian game. In your answer provide the payoff matrices.

(b) Solve for all Bayesian-Nash equilibria of this game (in pure and mixed strategies).

A number of terms and concepts from this chapter and a list of descriptions, definitions, and explanations follow. For each term (1-12) listed below, choose at least one corresponding item (a-p) below. Note that a single term may have more than one description and a single description may be used more than once or not at all. (a)Short-term management decision made using differential analysis. (b) Management decision in which lost revenue is compared to the reduction of costs to determine the overall effect on profit. (c)Exists when a company has not yet reached the limit on its resources. (d) Costs that have already been incurred. (0) Management decision in which fixed manufacturing overhead is ignored as long at there is enough excess capacity to meet the order. (f)Costs that can be avoided by choosing one option over another. (g)Step 5 of the management decision-making process. (h) Management decision in which relevant costs of making a produce internally are compared to the cost of purchasing that product. (1) Costs that are relevant to short-term decision making. (j) Resource that is insufficient to meet the demands placed on it. (k) First step of the management decision-making process. (1)costs that are always irrelevant to management dooinions. (m)Exists when a company has met its limit on one or more resources. (n)Benefits given up when one alternative in chosen over another. (o)Costs that change across decision alternatives. (piStop ] of the management decision-making process. Excess capacity Identify the decision problem. Bottleneck. Spockal-order decision. Differential costs 1 of 9A project manager is undertaking Cost Benefit analysis that will be presented to Senior Management for review and making final decisions. Which of the following actions should the project Manager do to BEST benefit Senior Management? Run a Cost-Benefit Variance Analysis (CBVA) report Form a Cost-Benefit problem-solving team Develop a viable business case for each alternative approach Eliminate a number of potential trade-offs so senior management will require less time to make decisionsA project manager is undertaking Cost Benefit analysis that will be presented to Senior Management for review and making final decisions. Which of the following actions should the project Manager do to BEST benefit Senior Management? Run a Cost-Benefit Variance Analysis (CBVA) report O Eliminate a number of potential trade-offs so senior management will require less time to make decisions Form a Cost-Benefit problem- solving team O Develop a viable business case for each alternative approachQuestion 20 (1 point) A project manager is undertaking Cost Benefit analysis that will be presented to Senior Management for review and making final decisions. Which of the following actions should the project Manager do to BEST benefit Senior Management? Develop a viable business case for each alternative approach Eliminate a number of potential trade-offs so senior management will require less time to make decisions Run a Cost-Benefit Variance Analysis (CBVA) report Form a Cost-Benefit problem-solving team