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Instruction Page 2
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In Part1, you will have one of the three types of the wage decision in each round:
One Job case 1
Two Jobs
One Job case 2
There is one empty job position and you want to hire a worker.
There are two workers, Ann and Bob. With equal chance, the worker who comes to you to get the job is either Ann or Bob.
You will submit your wage offer but when you make the offer, you do not know if the worker who wants to get a job is either Ann or Bob.
Each worker brings different revenue.
Each worker has a minimum willingness to accept, which means the minimum wage that the worker would accept.
The worker accepts any wage higher than or equal to the minimum willingness to accept
In that case, your profit is: Revenue the worker brings you - Wage Offer
Otherwise, the worker rejects the offered wage
In that case, your profit is 0
Below is an example of this wage decision.
Revenue from each Worker
Ann
Bob
30
20
Minimum Willingness to Accept
Ann
Bob
5
15
Suppose that you choose the wage of 10. Then only Ann would accept the job because 10 is greater than Ann's minimum willingness to payoff and less than Bob's
minimum willingness to payoff
Then, with one half probability Ann comes to you and you get
Revenue from Ann - Your wage offer
= 30 - 10 = 20.
With one half probability Bob comes to you but he rejects your offer. Then, your final payoff will be 0.