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Economics Assume the following positive externality coordination game. A department of certain company employs workers A and B. The company has an internal training program
Economics Assume the following positive externality coordination game. A department of certain company employs workers A and B. The company has an internal training program that allocates up to 100 hours of training to the department. Initially, the manager decides to allocate no=35 training hours to A and (1-mp)=65 hours are allocated to B. This decision is revised every week as follows: if one employee (say B) performs better than the other employee (A) at work, the manager allocates an extra hour to B and one less hour to A. The performance of each worker is measured with the functions BA() and BB(n-1) represented on the diagram below. BA(n) + BB (1 - n) n: Number of Training Hours of Employee A 100 100 1-7: Number of Training Hours of Employee B According to this model (select all that apply): O a. "The weak (Employee A) will become weaker over time." b. The initial decision by the manager to allocate more hours to B was inadequate, because although B was the more skilled worker, Employer A had more potential. The initial decision by the manager to allocate more hours to B can be described as an adverse selection possibly caused by asymmetric information (not knowing enough about the potential of the workers). O d. Both Employees A and B will end up with the same skill level. Je. The initial decision by the manager to allocate more hours to B was adequate, because B was the more skilled worker initially and hence had more potential. Of. "The strong (Employee B) will become stronger over time."
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