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1. Court Imposed Breach Remedies. Below is a depiction of the underlying game between two firms. (1.A) Firm B Invest (I) Not Invest (N) Firm

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1. Court Imposed Breach Remedies. Below is a depiction of the underlying game between two firms. (1.A) Firm B Invest (I) Not Invest (N) Firm A ZI, Z2 Y1, X2 Invest (1) (6, 6) (-15, 40) X1, Y2 (33, Not Invest (N) -10) (0. 0) In addition, suppose that the players contract in a setting of court-imposed breach remedies. The players can therefore write a formal (incomplete) contract specifying the strategy profile they intend to play; the court then observes their behavior in the underlying game and if one of them cheated, imposes a breach transfer. (1 A.i) What is the Nash equilibrium of the underlying game in terms of strategies and payoffs? (2 points)

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