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6.3 Homework Cindy Valdes (305) 901-9859 15.4 Salary Negotiation The below figure represents the potential outcomes of your first salary negotiation after graduation. Assuming this is a sequential-move, game with employer moving first, indicate the most likely outcome. Does the ability to move first give the employer an advantage? Is so, how? As the employee, is there anything you could do to realize a higher payoff? Since the employer can move first, the highest probability is that he will make a low salary offer and the employee can accept or reject it, but most likely I think he will acecept it because he just graduated from the University, and doesn’t have much experience negotiating. The situation would be different if the employee can move first. He can propose the higher salary and pretend he has better options outside, and maybe this way he has a chance to get paid better.
15.6 Entry Game with Withdrawal In the text, we considered a sequential-move game in which an entrant was considering entering an industry in competition with an incumbent firm (Figure 15.1).

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