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ii. Consider the following hypothetical scenario. Archer Daniels Midland and rm are the only two companies dominating the lysine market. European Commission is aware they
ii. Consider the following hypothetical scenario. Archer Daniels Midland and rm are the only two companies dominating the lysine market. European Commission is aware they are involved in global pricefixing. However the Commission does not have enough evidence to charge them. The only way the Commission can charge them= is by getting one of them to cooperate. The Commission approaches both companies urging them to cooperate and tmn against the other. The Commission gives the assurance that companies cooperating during its investigation will pay a minimum ne of 0.2 million Euro. If either one decides to cooperate._ the other pays a fine= where= m as the ringleader ofthe cartel pays 55 million Euro; and Archer Daniels Midland as one of the leading players in the cartel= pays 52 million Euro. However= if both companies decide to cooperate= they will be charged only 10% of the amount they need to pay if they had not cooperated. i. Draw the payo' matrix for this game and justify the payoff shown for the different strategies. Find the Nash Equilibrium forArcher Daniels Midland andmAW
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