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.Which of the following is likely to happen if Elly is known to be vengeful?

Question

Quizplus · Accepted Answer

If Elly is known to be vengeful, her employee is more likely to cooperate and run the shop properly to avoid potential retaliation, leading to both of them earning money.

Scenario: Elly Owns a Small Coffee Shop