1. Suppose that P’s beliefs are of the following form: if s s* then A is q1 for sure if s s* then A is q1 with probability p and q2 with probability (1 p). What are the ICE? 2. What would be the...

1. Suppose that P’s beliefs are of the following form: if s s* then A is q1 for sure if s s* then A is q1 with probability p and q2 with probability (1 p). What are the ICE?

2. What would be the consequences of assuming that costs are positively related to productivity: c1 c2?

May 26, 2022