Question 3 Consider a lobbying game between two firms, firm A and firm B. Each firm may lobby the government in hopes of persuading the government to make a decision that is favorable to the firm. The two firms independently and simultaneously decide whether to lobby (L) or not (N). Lobbying entails a cost of 15. Not lobbying costs nothing. If both Page 1 of of 2 GE2256: Game Theory Applications to Business Sem A 2022-2023 firms lobby or neither firm lobbies, then the government takes a neutral decision, which yields 10 to both firms. A firm's payoff is this value minus the lobbying cost if it lobbied. If firm B lobbies and firm A does not lobby, then the government makes a decision that favors firm B, yielding zero to firm A and 30 to firm B. Thus, firm B's payoff in this case is 30 15 15. If firm A lobbies and firm B does not lobby, then the government makes a decision that favors firm A, yielding 40 to firm A (so A's payoff is 40-15=25) and zero to firm B. (a) Write down the normal-form of this game with firm A as the row player and firm B as the column player. (b) Are there any pure strategy Nash equilibria (PSNE) of this game? If yes, write down the action profiles which are PSNE. (c) Find out the mixed strategy Nash equilibrium (MSNE) of the game.