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You wish to hire Ricky to manage your Dallas operations You wish to hire Ricky to manage your Dallas operations The profits from the operations depend partially on how hard Ricky works as follows

You wish to hire Ricky to manage your Dallas operations


You wish to hire Ricky to manage your Dallas operations. The profits from the operations depend partially on how hard Ricky works, as follows.
ProbabilitiesProfits = …$10,000 …Profits =$50,000
Lazy …..60% ………40%
Hard worker..20%…………………………..80%
If Ricky is lazy, he will surf the internet all day and he views this as a zero cost opportunity. However, Ricky would view hard working as a “personal cost” valued at $1,000. What fixed percentage of the profits should you offer Ricky? Assume Ricky only cares about his expected payment less any “personal cost”

 

 

You wish to hire Ricky to manage your Dallas operations

 

 

 

May 02 2020 View more View Less

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