Bonnie and Jessie are both workers on a team. At the same time both workers can choose to work on the risky project (R) or the safe project (S). If both choose to work on the R project the payoffs are 10 to Bonnie and 15 to Jessie. If both work on the S project the payoffs are 8 each. If Bonnie works on R and Jessie on S, the payoffs are (4, 6) to Bonnie and Jessie respectively. Finally, if Bonnie plays S and Jessie plays R, the payoffs are (6, 4).

a. What are the Nash equilibria of the game? Interpret your equilibria in terms of a firm using teams.

b. Now assume that Bonnie can move first and choose which project to work on. Jessie observes Bonnie's choice before making her choice of either R or S. What are the subgame perfect equilibria of the game? Interpret this sequential game in terms of communication and leadership in organisations.