Suppose Matt and Gabe must both choose between two jobs, a safe job that pays $250 per week and a risky job that pays $300 per week. The value of safety to each is $75 per week. Having more income than the other is worth $75 per week to each, and having less income than the other means a $75-per-week reduction in satisfaction. Having the same income as the other means no change in satisfaction. The payoff matrix below summarizes this situation. If Gabe and Matt choose their jobs at the same time, then you can predict that in the equilibrium of this game:
A)both Gabe and Matt will choose the safe job.
B)both Gabe and Matt will choose the risky job.
C)Gabe will choose the safe job and Matt will choose the risky job.
D)Matt will choose the safe job and Gabe will choose the risky job.

Question

Suppose Matt and Gabe must both choose between two jobs, a safe job that pays $250 per week and a risky job that pays $300 per week. The value of safety to each is $75 per week. Having more income than the other is worth $75 per week to each, and having less income than the other means a $75-per-week reduction in satisfaction. Having the same income as the other means no change in satisfaction. The payoff matrix below summarizes this situation.  If Gabe and Matt choose their jobs at the same time, then you can predict that in the equilibrium of this game:
A)both Gabe and Matt will choose the safe job. 
B)both Gabe and Matt will choose the risky job. 
C)Gabe will choose the safe job and Matt will choose the risky job. 
D)Matt will choose the safe job and Gabe will choose the risky job.

Quizplus · Accepted Answer

The Answer of Suppose Matt and Gabe must both choose between two jobs, a safe job that pays $250 per week and a risky job that pays $300 per week. The value of safety to each is $75 per week. Having more income than the other is worth $75 per week to each, and having less income than the other means a $75-per-week reduction in satisfaction. Having the same income as the other means no change in satisfaction. The payoff matrix below summarizes this situation.  If Gabe and Matt choose their jobs at the same time, then you can predict that in the equilibrium of this game:
A)both Gabe and Matt will choose the safe job. 
B)both Gabe and Matt will choose the risky job. 
C)Gabe will choose the safe job and Matt will choose the risky job. 
D)Matt will choose the safe job and Gabe will choose the risky job.

Suppose Matt and Gabe Must Both Choose Between Two Jobs