Consider the following information for a simultaneous move game: If you advertise and your rival advertises, you each will earn $5 million in profits. If neither of you advertises, you will each earn $10 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $15 million and the non-advertising firm will earn $1 million.

a. Draw a payoff matrix for this problem

b. What is the nash equilibrium? Explain.

c. Using the numbers, explain why the companies would want to collude

d. Using the numbers, explain why even if the companies do collude, there is a big incentive to cheat.