The owner of the Jets is going to offer a contract to a free agent player, Hapoleon. If signed, Hapoleon can give the Jets high effort or low effort. High effort costs Hapoleon $2 million and low effort costs Hapoleon nothing. The Jets' owner cannot observe Hapoleon's effort directly. Hapoleon has a guaranteed offer of $10 million from another team, the Sharks. If Hapoleon signs with the Jets, the team can be profitable or not and the Jets' owner can observe that. If Hapoleon gives high effort, then the probability the Jets are profitable is 80 percent, but if Hapoleon gives low effort, then the probability the Jets are profitable is 40 percent. Hapoleon is the typical risk neutral player and his utility is given by u(w) = w .

Calculate Hapoleon's expected payoff if he signs with the Jets and gives high effort.

For this one,

E(u|h) = phu(wH) + (1 ph)u(wL) dh

wH is high effort wage, wL is low effort wage, p is high effort probability, u is utility function, I don't get dh, I know that it is related to high effort but I don't know the value for this one.

I get 0.8(2) + (1-0.8)(0) - dh

am I doing this right?