What is the optimal strategy for the firm

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refer to the following matrix, where each entry shows the level of utility attained by group members from following a particular strategy.

Cooperate Shirk
Cooperate 10,8 5,4
Shirk 6,10 8,7

If there is asymmetric information what is the optimal strategy for the workers? What is the optimal strategy for the firm?

Is the employment contract between the firm and the workers self-enforcing? If yes, why? If not, which would be a self-enforcing contract?

Reference no: EM13185894

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