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2. Two rms must simultaneously choose their advertising budget; their options are H or L. Fayo's are as follows: if both choose H1 then each

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2. Two rms must simultaneously choose their advertising budget; their options are H or L. Fayo's are as follows: if both choose H1 then each gets 5; if both choose L, then each gets 4; if rm 1 chooses H and rm 2 chooses L, then rm 1 gets 8 and rm 2 gets 1; conversely: if rm 2 chocmes H and rm 1 chooses L, then rm 2 gets 8 and rm 1 gets I. (a) Determine the Xash equilibria of the oneshot game. [h] Suppose the game is indenitely repeated and that the relevant discount factor is 5 = .8. Determine the optimal symmetric equilibrium

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