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(b) Consider the urn-ball matching function with two workers and two jobs, workers { A, B } and jobs {1, 2}. Job 1 offers a
(b) Consider the urn-ball matching function with two workers and two jobs, workers { A, B } and jobs {1, 2}. Job 1 offers a wage no higher than a worker can expect in unemployment (payoff - 0) and job two offers a wage of 10 (payoff= 10). (i) Write down the normal form of the game (the payoff matrix). (ii) Calculate all the pure strategy Nash equilibria. Are there any dominating strategies? (iii) Are there any equilibria in mixed strategy? Discuss. (iv) Compute the expected unemployment rate from this game
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