1. (10) GM and Chrysler both must decide whether to invest in a new process. Games 1 and 2 below show how their profits depend on the decision they might make.

GAME 1		GAME 2
		Chrysler			Chrysler
		Invest	Don't Invest			Invest	Don't Invest
	Invest	5 for each	GM=12 Chrysler=4		Invest	GM=12 Chrysler=4	10 for each
GM		GM
	Don't	GM=4 Chrysler=12	10 for each		Don't	5 for each	GM=4 Chrysler=12
	Invest		Invest

a) (4) What is the Nash equilibrium from each game?

b) (6) Which of the games above (1, 2, both or neither) represents a prisoner's dilemma? Explain.