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Two telecom companies offer identical job positions but with different wages. Company 1 offers the position at a wage of $1000, while Company 2 pays
Two telecom companies offer identical job positions but with different wages. Company 1 offers the position at a wage of $1000, while Company 2 pays $1500 for the same ob. Two individuals want to apply for those positions. Clearly, they would like to get the better paid job, but the problem is that if the two of them apply to the same company then the company hires both workers and each of them gets half of the wage. That is, if the two workers apply to Company 1, then the two of them get the job but at a wage of only $500 Similarly, if the two workers apply to Company 2, then the two of them get the job but at a wage of only $750. If each worker applies to a different company, though, then each of them gets the job with full wage at the company he or she applied to. The decision of where to apply for a job must be taken by the two workers independently and without knowing the choice of each other.
a) Construct a payoff matrix for the game.
b) What is a dominant strategy? Do any of the players in this game have a dominant strategy?
c) Is there one or more (pure strategy) Nash equilibria? If so, what are they?
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