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So their payoff is just 30. They didn't get an education so it was free.
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They get 30 for free, so their payoff is just 30.
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If they deviate, if the bad workers deviate, then they get an MBA.
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So here come the bad workers. They find their way into my class in SOM.
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They have a miserable time.
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I have a miserable time because they're having a miserable time.
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But at the end of the day they're identified as good workers
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and hence they're paid 50.
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And their payoff is 50 - 3 x 10.01 which is approximately 20.
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Is that right?
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So they don't want to deviate either and now I'm done,
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I've shown it's an equilibrium.