Here is an example:
You need to decide your
minimum wage and
number of jobs you will apply.
If you choose
minimum wage at 5, and number of jobs at 3, you would then roll dice for each job.
To simplify the process, we recode each failure as 0, and recode each job offer you got with its wage rate.
Suppose you got 2 jobs out of 3. The wage rates are 4 and 6.
Your results are shown as [0, 4, 6].
Since 6 is the highest, you accept the job offer with wage rate at 6.
Suppose you are in Round 3, and your current earning so far is 290 points.
Your subsidy this round is 5 points. Your job search cost is 10 points.
Your payoff from new job is wage rate multiplied by the rest of rounds (including the current round):6*18=108 points.
Your total payoff is 5 + 108 - 10 = 103 points.
your total earning so far is 290 + 103 = 393 points.
However, since you need to return your endowments, your final payoff in this trial is 393-300=93 points
You will earn 93 points in this trial.
{% formfields %}
| Number of Jobs |
0 |
1 |
2 |
3 |
| Cost |
0 point |
2 points |
5 points |
10 points |
{% endblock %}