Question
There are three consulting firms hiring this year: Nous Group, BCG, and McKinsey. John will graduate from the MBA program at UoL and would like
There are three consulting firms hiring this year: Nous Group, BCG, and McKinsey. John will graduate from the MBA program at UoL and would like to find a job in consulting. John currently works as an intern at Nous. At the end of the internship, Nous will offer John a permanent position at the firm. If Chlo rejects the offer, she can then go to the job market, where BCG and McKinsey can simultaneously make offers to John. The game is as follows.First, Nous offers a wagewnto John.John can either accept or reject the offer. If John accepts Nous's offer, the game is over. If she rejects it, then BCG and McKinseysecretly and simultaneouslyoffer wageswbandwm. John can then accept BCG's offer (wb), or accept McKinsey's offer (wm), or reject both offers. John can generate a revenue of 100 for Nous but only of 50 for BCG or McKinsey. The payoff to a firm is the revenue generated by John, minus her wage if John accepts its offer, and zero if John rejects it. The payoff to John is the wage offered by the firm whose offer she accepts, and zero if she rejects all offers. As a tie-breaking rule assume that if John is indifferent between accepting and rejecting an offer at a given decision node, then sheacceptsit. Also, assume that if John is indifferent between accepting BCG's offer and McKinsey's offer, then she flips a coin to decide. Q1.Suppose that John rejects Nous's offer and goes to the job market, where BCG and McKinsey make offers simultaneously. What offers will BCG and McKinsey make?
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