- Question 1 1 Pts Self Assessment 16 2 Consider The Firm And Worker In Example 16 1 Like In Example 16 2 Assume Effo 1 (27.15 KiB) Viewed 31 times
the reservation utility changed to u_bar = 0.5. Would the
wage menu that you just found in the last problem meet the
participation constraint?
2. Now assume the worker in the problem above is
risk-neutral ( u(w) = w ). Find the optimal salaries.
You can again assume that reservation utility is zero.
Question 1 1 pts (self-assessment 16.2). Consider the firm and worker in Example 16.1. Like in Example 16.2, assume effort is unobservable. To match your answer key (!), assume the probabilities of the low effort outcomes are p=0.05 (low effort, high output) and p=0.95 (low effort, low output). Find the optimal salaries w_H* and w_L* for the worker. w_h=$82.81, w_L=$0 Ow_h=$20.25, w_L-$20.25 w_h=$0, w_L-$43.50 w_h=$0, w_L=$0
Correct! Question 1 1/1 pts (self-assessment 16.2). Consider the firm and worker in Example 16.1. Like in Example 16.2, assume effort is unobservable. To match your answer key (!), assume the probabilities of the low effort outcomes are p=0.05 (low effort, high output) and p=0.95 (low effort, low output). Find the optimal salaries w_H* and w_L* for the worker. w_h=$82.81, w_L=$0 w_h=$20.25, w_L-$20.25 w_h=$0, w_L-$43.50 w_h=$0, w_L=$0