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Problem 4: [20 pts] Consider the following situation. Anne and Bob are a married couple. Anne begins the game by deciding whether to go to Little Szechuan or McDonald's. Then at the same time, Bob chooses whether or not to "pay attention" to Anne's choice. If Bob chooses to pay attention, then Bob observes Anne's choice. On the other hand, if Bob chooses to "not pay attention," then Bob receives no information about Anne's choice. Then given whatever information Bob has available, Bob makes a decision of whether to go to Little Szechuan or McDonald's.

          Problem 4: [20 pts] Consider the following situation. Anne and Bob are a married couple. Anne begins the game by deciding whether to go to Little Szechuan or McDonald's. Then at the same time, Bob chooses whether or not to "pay attention" to Anne's choice. If Bob chooses to pay attention, then Bob observes Anne's choice. On the other hand, if Bob chooses to "not pay attention," then Bob receives no information about Anne's choice. Then given whatever information Bob has available, Bob makes a decision of whether to go to Little Szechuan or McDonald's.
        
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Added by Virginia D.

Principles of Economics
Principles of Economics
Gregory Mankiw 8th Edition
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Problem 4: [20 pts] Consider the following situation. Anne and Bob are a married couple. Anne begins the game by deciding whether to go to Little Szechuan or McDonald's. Then at the same time, Bob chooses whether or not to "pay attention" to Anne's choice. If Bob chooses to pay attention, then Bob observes Anne's choice. On the other hand, if Bob chooses to "not pay attention," then Bob receives no information about Anne's choice. Then given whatever information Bob has available, Bob makes a decision of whether to go to Little Szechuan or McDonald's.
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Transcript

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00:01 Hello students, let us solve the question.
00:04 The solution to part a is mac will choose to work 40 hours as there is same wage for overtime.
00:23 Solution to part b is wendy work at $4 per hour for 40 hours and after that overtime at $6 per hour...
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