A particular strategy increases a team’s chances of winning by .10. Let the value of winning = 100, and the cost of using the strategy = 5.

(a). Show that the strategy provides the team a net benefit.

(b). Now suppose it is determined that the strategy causes harm to those players who employ it as well as their opponents. Thus, the league makes its use a violation of rules. Assuming that use of the strategy is detected with certainty, what is the minimal dollar value of the sanction that will just deter it? (Assume that when indifferent, the team does not use the strategy.)

c). What is the minimum sanction that deters the strategy if it is detected one quarter of the time it is used?

(d). Show how your answers in(b) and (c) change if the value of winning increases to 150.