Alexandra and Bob can each choose how hard to work on a task. Each person's output is if they are lazy, and if they work hard. The cost of effort is if they are lazy, and if they work hard. The total output is shared equally between them. For example, if Alexandra puts in her effort but Bob does not, her net income is . If both workers are completely selfish, then in the equilibrium outcome they will each end up with a net income of:
Working hard costs more than working lazy, and brings a selfish individual . So, no one will work hard. In this case, each worker's cost of effort will be and the joint output will be , which will be shared equally to bring to each of them.