Player 1 and 2 are thinking of starting a new company. Suppose that there are two types for Player 1: Type-O(ordinary) with prob. 3/4 and Type-C(cooperative) with prob. 1/4. Player 1's type is private information.

• At the start of the game Player 1 decides whether to invest or not. If player 1 decides not to invest, game ends.
• If he decides to invest, then Player 2 decides whether to invest or not.
• If Player 2 decides 2 invest, Player 1 decides to steal or split the profits.
• Player 2 observes Player 1 's decision to invest or not before making her investment decision.
• Player 1 observes Player 2's decision before deciding whether to split or steal.

Payoffs from different scenarios are summarized in the table (attached photo):