Two candidates, 1 and 2, compete for a job. The employer is not willing to pay a wage higher than $15 and is obliged by law to pay at least the…

Two candidates, 1 and 2, compete for a job. The employer is not willing to pay a wage higher than $15 and is obliged by law to pay at least the minimum wage $10. The employer asks the candidates to send him a written wage demand (which must be an integer between 10 and 15). He promises to accept the lower demand. In the case that both make the same demand, he promises to accept worker 1 (since he held the job previously). Assume that each worker is interested in as high a wage as possible.

Present the situation as a strategic game (write down the payoff matrix) and show that it has a unique Nash equilibrium.

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