1. Cable company wars. Two Tv Cable companies, Cable A and Cable B, must decide their advertising plans for next season. Each has two options: "normal" advertising level or a special campaign with an endorsement by singer Drake. The companies must simultaneously decide which strategy to choose.

Net profits, as a function of their choices, are as follows. If both firms choose "normal" advertising levels, then Cable A makes 160 and Cable B makes 120. If Cable A goes for "normal" and Cable B signs Drake, then Cable A gets 40 and Cable B gets 100. If Cable A signs Drake and Cable B does not, then Cable A gets 240 and Cable B gets 80. Finally, if both companies sign Drake then Cable A loses 120 and Cable B loses 80. All of these values are common knowledge to the players. The players' goal is to maximize net profit.

(a) Depict the above situation as a matrix game.

(b) Are there any dominant strategies in this game?

(c) What are the best responses for each player?

(d) What is the Nash equilibrium of this game?