Lori employs Max. She wants him to work hard rather than to loaf. She considers offering him a bonus or not giving him one. All else the same, Max prefers to loaf.

If they choose actions simultaneously, what are their strategies? Why does this game have a different type of equilibrium than the game in question2.7?

Transcribed Image Text:

Max Work Loaf Bonus Lori 0 0 Bonns 0