1. Consider the following version of a trust game with two players, a firm and a worker. They are both risk neutral. The worker moves first. He can ACQUIRE skills that are specific to the firm that he works with (e.g develop a relationship with a customer) at a cost C > 0 or choose to NOT ACQUIRE skills. These are skills that are only valuable to the firm and not to outside employers. The firm after observing a worker's skill choice must decide on whether to PAY the worker, B > C (B is assumed to be a parameter here) or NOT PAY the worker. If skills are acquired the firm gets an output of y, otherwise the firm gets an output of 0. (a) Draw the game tree for this version of the trust game. (b) Suppose this game is played only once. What is the Nash Equi- librium? (c) Now suppose the stage game above is played repeatedly for an infinite number of periods. Assume that the player's payoffs in this repeated game are the discounted sum of payoffs in each period and denote the interest rate by r. Using grim trigger strategies, find conditions under which the cooperative outcome, where the worker acquires skills and the firm pays the worker if and only if skills are acquired, is a Nash Equilibrium of the repeated game