Jim is a salesperson at the DM paper company. The utility function of Jim is given by u(w, b, e) = w + b c(e) where w is Jim s weekly wage, b is a bonus payment that is conditional on sales revenue, and c(e) is Jims cost of effort where c(e) = 1 if e < 10 and c(e) = ( 1 2 (e 10) 2) if e 10.

Dwight is Jim's partner. Michael assigns Jim and Dwight to work on a joint project, which can be described as a simultaneous move game with the following payoffs: Jim Work Hard Shirk Sabotage Dwight Work Hard 10, 12 10,20 -20, 15 Shirk 20, -5 0,0 25, -15 Sabotage 8, -30 -15, 30 -10, -10 Find the Nash equilibrium of this game. (1.5 marks) 2) Imagine your washing machine is broken, and you want to buy a brand new one.

a) Search online and make a (random) list with ten washing machine models. (1 mark)

b) What are the attributes of a washing machine that are most important to you? Describe your utility function u(a, b, c, d, p) where a, b, c, d are different attributes of the washing machine and p is the price. (1.5 marks)

c) Make a choice using the "satisficing" heuristic. Describe your choice process.