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Two players: Employees vs managers Strategies: Employees can work hard or shirk Managers can monitor or not Payoff: Employee's salary is $100k unless caught shirk;
Two players: Employees vs managers Strategies: Employees can work hard or shirk Managers can monitor or not Payoff: Employee's salary is $100k unless caught shirk; if caught, salary is $0 Employee's cost of effort: $50k Value of employee output for managers: $200k Profit is employee shirks: $0 Cost of monitoring: $10k
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