Consider the following inspection game between an employer and their employee, where c is the cost to the employer of carrying out an inspection of his or her employee. Employer Spot Inspection Long Nap 2.3-c)--(2.3) Employee Work Hard! (3,2) (a) Show that if 4 >c >0 this game does not have pure strategy equilibrium (b) Solve for a mixed strategy equilibrium either as function of c (when 0 < c < 4), or for two specific values, c = 1 and c= 2 (c) How does the behavior of the boss change as c increases? How does the behavior of the worker change, as c increases? What does this imply about how much attention a boss ought to rationally allocate toward their workers?
