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1. Two risk neutral players compete to win a prize, P. The probability of winning depends on effort; the probability that player i wins equals

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1. Two risk neutral players compete to win a prize, P. The probability of winning depends on effort; the probability that player i wins equals e/(e1+e2), where e is the effort level of player i. The cost of effort is ciei. a) Find the Nash equilibrium effort levels. b) What is the probability player 1 wins at equilibrium

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