Smith and Jones face the choice of driving to work early or late. If they both drive to work at the same time, each gets in the way of the other on the road, and so their daily commute takes longer and is more irritating. The monetary payoffs for each person are listed in the table on the next page for each of the four possible combinations of actions:
a. If Smith and Jones are payoff maximizers and make their decisions individually, what will they do?
b. If Smith and Jones can make binding agreements with each other, what will theydo?

  • CreatedDecember 12, 2014
  • Files Included
Post your question