(3.4 (25%} Consider two states, A and B claiming a disputed resource which yields an income of 300,000. If they go to war, the winner of the conflict takes the entire resource and the loser gets nothing. However, during the war part of the resource is destroyed reducing the income accruing to the winner by 30%. When they ght, state A has to spend a sum 100,000 on military expenditure and wins with a probability 60% while state, B has to spend 65,000 on guns. Instead of ghting, the two states may settle peacefully, in which case they divide the resource with state A taking a proportion x and state 2 taking the rest. Ifthey settle, the military spending to defend the settlement falls to 61,000 for A, while for E falls to 45,000. (i) Determine the range of values of the division parameter at so that the two states do not ght. (ii) How does the range of the division parameter it change if the Egg destruction from war falls to 10% but El needs to spend 59,000 on guns to defend the settlement when they settle? (iii) Is settlement more likely under {i} or {ii}