Question
(Fill in the black and show working out): Q) Two young partners at a consulting firm, Bob and Paul, decide to leave the firm and
(Fill in the black and show working out):
Q) Two young partners at a consulting firm, Bob and Paul, decide to leave the firm and set up their own partnership. They agree to maintain the partnership for one year and to split the profits 50/50. If both work hard, the new firm will make profits of $16 million. If one of the consultants works hard while the other shirks, the firm's profits will be $10 million. If both shirk, the firm's profits will be $6 million. The disutility of working hard is equivalent to $1 million in a year. In this "partnership game", there is (are) __________ Nash equilibrium (equilibria).
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