Question: table [ [ Employee Value,Probability ] , [ $ 7 0 , 0 0 0 , 0 . 1 2 5 ] , [

\table[[Employee Value,Probability],[$70,000,0.125],[$87,000,0.125],[$104,000,0.125],[$121,000,0.125],[$138,000,0.125],[$155,000,0.125],[$172,000,0.125],[$189,000,0.125]]
The expected value of hiring one employee is
Suppose you set the salary of the position equal to the expected value of an employee. Assume that employees will not work for a salary below their employee value.
The expected value of an employee who would apply for the position, at this salary, is
Given this adverse selection, your most reasonable salary offer (that ensures you do not lose money) is
\ table [ [ Employee Value,Probability ] , [ $ 7

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