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  3. 1. you and a classmate are assigned a project on w

1. You and a classmate are assigned a project on which you will receive a...

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Accounting

1. You and a classmate are assigned a project on which you will receive a good grade, but you also want to avoid work. In particular here is the situation: If both of you work hard, you both get an A, which gives each of you 40 units of happiness. If only one of you works hand, you both get a B, which gives of you 30 units of happiness. If neither of you works hard, you both get a D, which gives of you 10 units of happiness. Working hard costs 25 units of happiness.

a) Draw a 2 X 2 decision box for you and your classmate and fill in the payoffs.

b) What is the likely outcome? Explain your answer.

c) If you get this classmate as your partner on a series of projects throughout the year, rather than only once, how might that change the outcome you predicted in part (b)?

d) Another classmate cares about good grades: He gets 50 units of happiness from a B and 80 units of happiness from an A. If this classmate was your partner (but your preferences were unchanged) how would your answer to part (a) and (b) change? Which of the classmate would you prefer as a partner? Would he also want you as a partner?

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