Question

Elly owns a small coffee shop. she has only one employee. one​ weekend, she decided to take a break from work. she is wondering whether she should trust her employee to run the shop in her absence. if she does not trust​ him, she would have to keep the shop​ closed, in which case neither she nor her employee will be able to make money. on the other​ hand, if she trusts​ him, he can either cooperate and run the​ shop, or he can defect and steal from the shop. if he​ cooperates, both of them will earn money. if he steals from the​ shop, he will make more money while she will lose. refer to the scenario above. elly should use​ ________ to make her decision.

a. forward induction
b. mixed strategies
c. backward induction
d. her dominant strategy

Answer 1

The answer to your question is

`\boxed{\bf C.~backwards~induction}`



`\bf Explanation:`

Backward induction is a process of decision making where you reason backward of the situation.

Hope this helped!