2. (18 points) (inspired in exercise 4.2 of textbook) The fictitious country of Croatia is having an election for prime-minister this fall. There are two candidates in the race: Costa, and Rio. Each of them must choose a TV advertising strategy. They have two options: go positive (highlighting their own experience, skills, and ideas for the country) or negative (attacking the opponent with a mix of factual, exaggerated, and maybe even fake claims about their record and ideas).

The candidates care about winning, but they also care about their reputation (which is tarnished if the opponent uses a negative campaign). Suppose that negative ads are more effective at increasing a candidate's chances of winning than positive ads.

• a) Make a payoff matrix representing the game played by the two candidates in which the payoffs are consistent with the information presented above (to do so, pick arbitrary payoffs for one of the outcomes - say, the one where both choose a positive campaign - and then choose payoffs that are consistent with this for the other outcomes).

• b) On that matrix, identify the best responses for each player. Do they have dominant strategies?

• c) In light of part b, can we say that this game is a social dilemma?