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. backward induction
B, mixed strategies
C. her dominant strategy
D, forward induction
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