3. (10 points total) Anheuser-Busch (AB) and Molson Coors (MC) are the only two beer companies whose products are seriously considered by ice hockey fans. Each of the two companies needs to decide whether to advertise their products during the National hockey League's (NHL) Stanley Cup playoffs. Doing so would cost each company $50 million.

For the purpose of this exercise let's assume that in the absence of advertising AB's monthly sales in North America amount to $800 million whereas MC's monthly sales are $400 million. Interestingly, if both of them advertise, the competing ads cancel each other out, and monthly sales remain at the same level. If only one company advertises, then its sales increase by $120 million for one month, while the sales of the non-advertising company decrease by $80 million... but that only lasts for a month, after which everything returns to the original levels. (Hockey fans have short memory.)

a. (2.5 pts) Present this situation as a simultaneous-move game. Hint: When you analyze this problem, don't forget to account for the cost of advertising where applicable.

b. (1.5 pts) State the outcome of the game that is the most desirable for both companies.

c. (2 pts) How likely is the outcome from part B to be achieved and sustained if the game is played repeatedly year after year? If it is unlikely, then explain why. If it is likely, then explain what needs to be done for that to happen.

d. (2 pts) Does your answer in part C depend on the rate at which the companies discount future payoffs? If yes, then explain how exactly.

e. (2 pts) Suppose the NHL is considering a complete ban on beer advertising during its games. Should Anheuser-Busch and Molson Coors lobby in favor or against such a ban? Explain your opinion.