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Firm A Advertise 0,0 40, -1 Strategy Don't Advertise | Don't Advertise -:L, 40 1o, 10 Two cigarette manufacturers play the following simultaneous-move billboard advertising
Firm A Advertise 0,0 40, -1 Strategy Don't Advertise | Don't Advertise -:L, 40 1o, 10 Two cigarette manufacturers play the following simultaneous-move billboard advertising game. Profit payoffs for both companies are shown in the normal form game below. There is a 20 percent chance that the government will ban cigarette sales in any given year. If they collude and Firm A cheats, h0w much will Firm A earn in period 1? {Enter a numerical value as your answer with no decimal points. For example, ifyOur answer is "one hundred" you need to type in "100"J. "5/ B What is the probability that the game will end? [Enter a numerical value as your answer with no decimal points. For example, ifyour answer is \"one hundred percent\" you need to type in "100"J. *5; B If they collude and Firm A cheats, what will be the profit for Firm A for all periods? [Enter a numerical value as your answer with no decimal points. For example, if your answer is "one hundred" you need to type in "100"). B 't/ If they collude, cooperate and Firm A does not cheat, what will be the profit for Firm A for all periods? [Entera numerical value as your answer with no decimal points. For example, if your answer is "one hundred" you need to type in "100\"). 't/ B Does Firm A have an incentive to cheat? (Type "yes" or "no" for yOur response}. '9'! U
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