1. Suppose the cable TV companies Astounding Cable and Broadcast Cable are in your city. They both must decide on a high advertising budget, a moderate advertising budget, or a low advertising budget. They will make their decisions simultaneously. Their payoffs are as follows: Astounding/ Broadcast High Medium Low High Astounding earns $2 million Astounding earns $5 million Astounding earns $4 million Broadcast earns $5 million Broadcast earns $7 million Broadcast earns $9 million Medium Astounding earns $6 million Astounding earns $8 million Astounding earns $5 million Broadcast earns $4 million Broadcast earns $6 million Broadcast earns $2 million Low Astounding earns $1 million Astounding earns $0 million Astounding earns $3 million Broadcast earns $2 million Broadcast earns $5 million Broadcast earns $3 million

a. Does Astounding have a dominant strategy? If so, what is it?

b. Does Broadcast have a dominant strategy? If so, what is it?

c. Is there a dominant strategy equilibrium? If so, what is it?

d. Are there any Nash equilibria in this game? If so, what are they?