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1) There are two players. Each player is given an unmarked envelope and asked to put in it either nothing or $300 of his


1) There are two players. Each player is given an unmarked envelope and asked to put in it either nothing or $300 of his own money or $600 of his own money. A referee collects the envelopes, opens them, gathers all the money, then adds 50% of that amount (using his own money) and divides the total into two equal parts which he then distributes to the players. (a) Suppose that Player 1 has some animosity towards the referee and ranks the outcomes in terms of how much money the referee loses (the more, the better), while Player 2 is selfish and greedy and ranks the outcomes in terms of her own net gain. Represent the simultaneous game with a payoff matrix. (b) Find the Nash equilibria of the game.

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