Question
In a one-shot game, if you advertise and your rival advertises, you will each earn $5 million in profits. If neither of you advertise, your
In a one-shot game, if you advertise and your rival advertises, you will each earn $5 million in profits. If neither of you advertise, your rival will make $4 million and you will make $2 million. If you advertise and your rival does not, you will make $10 million and your rival will make $3 million. If your rival advertises and you do not, you will make $1 million and your rival will make $3 million.
a. Assuming bribery is legal, customary, and acceptable, what are the minimum and maximum amounts you should offer to bribe your rival not to advertise?
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