2. Consider the following "arms race" scenario. Both the US and China are currently engaged in large-scale attempts to hack each others' IT infrastructure, the attack on Microsoft Exchange servers and the attack on Chinese university servers being prominent examples. Both countries would obviously be better off if neither attacked the other, and both are obviously worse off when they are attacked, but a cyber-attack can also gain valuable information for the attacker. See the payoff matrix below. The payoffs represent rankings, so 3 represents the best outcome and the worst. China Attack Don't attack US Attack 1, 1 3,0 Don't attack 0,3 3,3 A. Solve the game for pure strategy Nash equilibrium. How many equilibria are there? Explain. B. Solve the game for mixed strategy equilibrium. With what probability should the US attack? With what probability should China attack? C. Graph the best response curves. You can upload a hand-drawn picture, or draw it in Word or other software. D. Calculate the expected payoffs to each country in mixed strategy equilibrium. E. Suppose one country, say the US, decides to move first by publicly declaring its intentions. Draw a game tree depicting the game. F. Solve the game in (E) for rollback equilibrium. Explain your reasoning. G. Why do you think the outcome in (F) does not occur in real life? Explain. H. Could either side use a strategic move to ensure that it does? If yes, what kind, and how? What issues would have to be taken into consideration