QUESTION

Consider the following strategic situation concerning the owner of a firm

(O), the manager of the firm (M), and a potential worker (W). The owner

first decides whether to hire the worker, to refuse to hire the worker, or to

let the manager make the decision. If the owner lets the manager make the

decision, then the manager must choose between hiring the worker or not

hiring the worker. If the worker is hired, then he or she chooses between

working diligently and shirking. Assume that the worker does not know whether he or she was hired by the manager or the owner when he or she

makes this decision. If the worker is not hired, then all three players get

a payoff of 0. If the worker is hired and shirks, then the owner and manager

each get a payoff of1, whereas the worker gets 1. If the worker is

hired by the owner and works diligently, then the owner gets a payoff of

1, the manager gets 0, and the worker gets 0. If the worker is hired by the

manager and works diligently, then the owner gets 0, the manager gets 1,

and the worker gets 1. Represent this game in the extensive form (draw the

game tree).