5. Individual Problems 15-5 Every year. management and labor renegotiate a new employment contract by sending their proposals to an arbitrator, who chooses the best proposal {effectively giving one side or the other $3 million). Each side can choose to hire, or not hire, an expensive labor lawyer {at a cost of $100,000) who is effecb've at preparing the proposal in the best light. If neither hires a lawyer or if both hire lawyers, each side can expect to win about half the lime. If only one side hires a lawyer, it can expect to win four lths, or 0.8, of the time. Use the given information to ii in the expected payoff, in doiiars, for each ceii in the matrix. (Hint: To find the expected payof muitipiy the probabiiity of winning by the doiiar amount of the payoff. Be sure to account for iawyer costs, which are incurred with certainty if a iawyer is hired. J Management [M] NoLawyer Lawyer No Lawyer L: |$ 'MiIS I L: I$ Im LaboriL} Lawyer L: |$ ,M:|$ I L1I$ I _ The Nash equilibrium for this game is for Management to v a lawyer, and for Labor to v a lawyer