Problem: In the summer ECMBA has a group project. Students are assigned to two person groups that have to prepare a 25 point paper applying game theory to competitive strategy. If both students work they each receive a payout of $200. If one student works and one student shirks, the hard-working student receives a payout of $150 and the shirking student receives a payout of $250. If both students shirk they each receive a payout of $185. (The monetary payoffs factor in the monetary value of the student's grade and the opportunity cost of time.)
A) Fill in the following game matrix using the numerical information provided.
Jane:
Work Shirk
Work
Joe:
Shirk
B) Does Joe have a dominant strategy? Why or why not?
Does Jane have a dominant strategy? Why or why not?
C) What is/are the Nash equilibrium or Nash equilibria of this one-shot game?
D) How can you improve this organizational architecture?