8. Refer to following variations of the payoff matrix for the environmental game shown in Figure 11-6. In this problem, a number is assigned to represent the welfare level of each outcome for Home and Foreign.

a. First, consider the case of global pollution in which the government puts more weight on producer profits than consumer wellbeing when calculating welfare (this is so since a portion of consumer costs are borne by the other country). How can you tell that the government favors producers over consumers from the following payoff matrix?

What is the Nash equilibrium for this environmental game? Is it a prisoner’s dilemma?

Briefly explain.