The employee (Shafiq) and the employer (Ahmad). Shafiq has to choose whether to pursue training that costs Rs:1000 to himself or not. Ahmad has to decide whether to pay a fixed wage of Rs:10000 to Shafiq or share the revenues of the enterprise 50:50 with Shafiq. The output is positively affected by both training and revenue sharing. Indeed, with no training and a fixed wage total output is Rs: 20000, while if either training or profit sharing is implemented the output rises to Rs: 22000. If both training and revenue sharing are implemented the output is Rs: 25000.

a) Construct the pay-off matrix

b) Is there any equilibrium in dominant strategies?

c) Is there any Nash equilibrium?