Chapter $18$ Problems & Applications

$6.$ Problems and Applications Q$6$

You and a classmate are assigned a project on which you will receive one combined grade. You each want to receive a good grade, but you also want to avoid hard work. In particular, here is the situation:

If both of you work hard, you both get an A$,$ which gives each of you $25$ units of happiness.

If only one of you works hard, you both get a B$,$ which gives each of you $15$ units of happiness.

If neither of you works hard, you both get a D$,$ which gives each of you $5$ units of happiness.

Working hard costs $15$ units of happiness.

Complete the following payoff matrix given the previous information. In each cell, your classmate's payoff is on the left and yours is on the right.

Your Decision

$\backslash$table$[[,$Work,Your Decision,$],[$Classmate$\text{'}$s Decision,Work,Shirk,$],[25.,25,15,15,],[$Shirk$,15,15,5.,5,]]$

The likely outcome is that your classmate $$ works and you work

$q,.$

If you get this classmate as your partner on a series of projects throughout the year, rather than only once, you are $q,$ likely to engage in cooperation.