Scenario: Elly owns a small coffee shop. She has only one employee. One weekend, she decides 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. In contrast, 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.This is an example of ________.

Question

Quizplus · Accepted Answer

This scenario is an example of a trust game. Elly must choose whether to trust her employee or not, and the outcome depends on the actions of both parties. If they both cooperate, they both benefit. If the employee defects, they get more benefit but Elly loses. Therefore, the best choice would be to trust the employee and hope for cooperation. However, it is important for Elly to have some safeguards in place to prevent theft or other negative outcomes.

Scenario: Elly Owns a Small Coffee Shop