a. Find the SPE of this game. What is the SPE outcome? (10 points) b. Does this game have other Nash equilibria? (15 points) 3. Two legislators select a policy that affects them both, by alternately vetoing policies until one remains. First legislator 1 vetoes a policy. If more than one policy remains then legislator 2 vetoes a policy. If more than one policy still remains, legislator 1 then vetoes another policy. The process continues until a single policy remains. Suppose that there are three possible policies only, X, Y, and Z. Legislator 1 prefers X to Y to Z, and legislator 2 prefers Z to Y to X. a. Model this situation as an extensive game by drawing the game tree. Identify the SPE. Which policy is selected? (12 pts) b. Give an example of a strategy for legislator 2 and explain what it means. (5 pts) c. How would your answer change in part a. if now legislator 1 prefers Y to Z to X? (8 pts) 4. Tim Hortons and Starbucks are in a price competition. Both can choose either a low price (Defect) or a high price (Cooperate), and their choices are made simultaneously. The reward