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Instruction Page 3
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You will have one of the two types of the wage decision in each round:
One kind of Jobs
Two kinds of Jobs
There are two kinds of jobs, Job 1 and Job 2 , and each job has two vacant positions. Thus, there are four total positions to fill.
There are two workers, Ann and Bob.
Both Ann and Bob can work for both jobs.
That means, Ann can work only for Job 1, only for Job 2, or she can take both jobs.
Bob also can work only for Job 1, only for Job 2, or can take both jobs.
For each kind of jobs, you can choose to hire two workers, one worker, or no workers.
You will submit your wage offers. You will submit ONE wage for each kind of job.
That means, you will submit one wage for Job 1 and another wage for Job 2.
Each worker has a minimum willingness to accept, which means the minimum wage that the worker would accept.
For each job and each worker,
The worker accepts any wage higher than or equal to the minimum willingness to accept
In that case, your profit is: 0.5 x (Revenue the worker brings you - Wage Offer)
Otherwise, the worker rejects the offered wage
In that case, your profit is 0
Your final profit is the sum of the profit you get from the four positions (two of Job 1 and two of Job 2).
Below is an example of this wage decision.
Revenue from each Worker
Ann
Bob
Job 1
51
37
Job 2
45
30
Minimum Willingness to Accept
Ann
Bob
Job 1
30
35
Job 2
25
33
Suppose that you choose 35 for Job 1 and 27 for Job 2
Then, both Ann and Bob would accept the offer for Job 1 since 35 is greater than or equal both Ann and Bob's minimum willingness to accept for Job 1.
For Job 2, only Ann would accept the offer because 27 is greater than Ann's minimum willingness to accept and less than Bob's willingness to accept for Job 2.
In this case, your payoff will be
0.5 x (Revenue from hiring Ann to Job 1 - your wage offer for Job 1)
+ 0.5 x (Revenue from hiring Bob to Job 1 - your wage offer for Job 1)
+ 0.5 x (Revenue from hiring Ann to Job 2 - your wage offer for Job 2)
+ 0
= 0.5 x (51-35) + 0.5 x (37-35) + 0.5 x (45-27) + 0 = 18