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Please help with (1.B.iv) (1.B) Let the new underlying game be given by the following strategic form representation: Firm B Invest (I) Not Invest (N)

Please help with (1.B.iv)

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(1.B) Let the new underlying game be given by the following strategic form representation: Firm B Invest (I) Not Invest (N) Firm A ZI, Zz Y1, X2 Invest (I) (20, 23) (-16, 32) X1, Y2 (24, Not Invest (N) -14) (0, 0) (1.B.i) Write out the payoffs associated with the induced game under the assumption that the court imposes restitution damages. Can a contract specifying (I, 1) be enforced? (4 points) Firm B Invest (I) Not Invest (N) Firm A Invest (I) Not Invest (N) (1.B.iv) Given your answer (1 B.i), explain why the concept of the court-appointed remedy, restitution damages, is particularly effective. Why might the remedy be undesirable from an efficiency point of view? Does restitution damages always promote social welfare? (3 points)

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