LEXIEE1653 LEXIEE1653

09-05-2024
Business

Answered

After years of hard work, Sara has landed a contract as a professional content creator(e.g., a social media influencer). Eager to leverage her trending status by bringing inloads of endorsements, she asks Jessie MacGuire to be her personal manager. Jessie hasoffered Sara a choice of two payment plans. Sara can engage Jessies services for a flatfee or Sara can pay Jessie a percentage of all endorsement revenue. On the other hand,Jessie can put in modest effort or high effort to earn Sara endorsements.
Use the following payoff descriptions to complete/draw the game tree for thesequential game played between Sara and Jessie. Let Sara be the first mover.
a. If Jessie puts in High Effort after Sara chooses the Flat Fee, Jessie willearn $50,000 and Sara will earn $925,000
b. If Jessie puts in Modest Effort after Sara chooses the Flat Fee, Jessie willearn $95,000 and Sara will earn $500,000.
c. If Jessie puts in High Effort and Sara chooses the Percentage, Jessie willearn $85,000 and Sara will earn $925,000
d. If Jessie puts in Modest Effort after Sara chooses the Percentage, Jessie will earn $70,000 and Sara will earn $510,000

Answer :

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