Eileen knows that if they both work hard, Clancy will earn $80 on the beach and Eileen will earn $160 at her stand, so they will each take home half of their total revenue: $80 + $160 = $120. If Clancy shirks, he'll generate only $50 in earnings. Eileen does not know that Clancy estimates his personal cost (or disutility) of working hard as opposed to shirking at $20. Once out of Eileen's sight, Clancy faces a dilemma: work hard (put in full effort) or shirk (put in low effort). In terms of Clancy's total utility, it is worse for him to work hard. Taking into account the loss in utility that working hard brings to Clancy, Eileen and Clancy together are better off if Clancy shirks instead of working hard. Eileen knows Clancy will shirk if unsupervised. She considers hiring her good friend Carrie to keep an eye on Clancy. The most Eileen should be willing to pay Carrie to supervise Clancy, assuming supervision is sufficient to encourage Clancy to work hard, is $20.