1. * ) before the decrease in c, but pooling at ? ?1 (p) is the unique undefeated equilibrium after the decrease in c. Thus, the equilibrium level of overtime chosen by the good type decreases, while the equilibrium choice of the bad type jumps from zero (under separation) to ? ?1 (p) > 0. Similarly, there exists > 0 such that the largest level of effort in an undefeated equilibrium is ? ?1 (p) for any p ? (?(?) ? , ?(?)) before the decrease in c;By continuity, there exists > 0, such that separation occurs for any p ?
2. Why Not Let Others do the Work?