Exhibit 15A-1
Suppose GM and Nucor Steel seek to develop jointly a new sheet metal and auto body stamping machine,and each party knows the payoffs in the following table of equi-probable outcomes but cannot independently verify one another's costs.Both GM and Nucor can cancel the project and both will then earn $0 if the cost revelations give early warning of losses.

Note: The figures in parentheses represent costs associated with the Low and High cost realizations,and all figures are in millions.The joint profit payoffs are the difference between $180 and the sum of the cost realizations.
-Refer to Exhibit 15A-1.
$\textbf{ Part A: }$ What is the incentive-compatible revelation mechanism that will induce true revelation of the asymmetric cost information and maximize the value of the partnership?

Question

Exhibit 15A-1
Suppose GM and Nucor Steel seek to develop jointly a new sheet metal and auto body stamping machine,and each party knows the payoffs in the following table of equi-probable outcomes but cannot independently verify one another's costs.Both GM and Nucor can cancel the project and both will then earn $0 if the cost revelations give early warning of losses.
  
Note: The figures in parentheses represent costs associated with the Low and High cost realizations,and all figures are in millions.The joint profit payoffs are the difference between $180 and the sum of the cost realizations.
-Refer to Exhibit 15A-1.
$\textbf{      Part A:    }$ What is the incentive-compatible revelation mechanism that will induce true revelation of the asymmetric cost information and maximize the value of the partnership?

Quizplus · Accepted Answer

The Answer of Exhibit 15A-1
Suppose GM and Nucor Steel seek to develop jointly a new sheet metal and auto body stamping machine,and each party knows the payoffs in the following table of equi-probable outcomes but cannot independently verify one another's costs.Both GM and Nucor can cancel the project and both will then earn $0 if the cost revelations give early warning of losses.
  
Note: The figures in parentheses represent costs associated with the Low and High cost realizations,and all figures are in millions.The joint profit payoffs are the difference between $180 and the sum of the cost realizations.
-Refer to Exhibit 15A-1.
$\textbf{      Part A:    }$ What is the incentive-compatible revelation mechanism that will induce true revelation of the asymmetric cost information and maximize the value of the partnership?

Exhibit 15A-1 Suppose GM and Nucor Steel Seek to Develop Part A: \textbf{ Part A: } Part A:

Exhibit 15A-1
Suppose GM and Nucor Steel Seek to Develop $\textbf{ Part A: }$