5 A Japanese electronics company and an American electronics company are both considering working on developing a superconductor. If both companies work on the superconductor, they will have to share the market, and each company will lose $10 billion. If only one company works on the superconductor, that company will earn $100 billion in profits. Of course, if neither company works on the superconductor, then each company earns profits of $0.

a Formulate this situation as a two-person nonconstantsum game. Does the game have any equilibrium points?

b Now suppose the Japanese government offers the Japanese electronics company a $15 billion subsidy to work on the superconductor. Formulate the reward matrix for this game. Does this game have any equilibrium points?

c Businesspeople have often said that a protectionist attitude toward trade can increase exports, but economists have usually argued that it will reduce exports.

Whose viewpoint does this problem support?