You wish to hire Ricky to manage your Dallas operations. The profits from the operations depend

partially on how hard Ricky works, as follows:

	Probabilities
	Profit = $10,000	Profit = $50,000
Lazy Worker	60%	40%
Hard Worker	20%	80%

If Ricky is lazy, he will surf the Internet all day, and he views this as a zero cost opportunity.

However, Ricky would view working hard as a personal cost valued at $1,000. What fixedpercentage

of the profits should you offer Ricky? Assume Ricky only cares about his expected

payment less any personal cost.

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