Question 4 (26 marks) Entrant Monopolist Fight -20 30 Ps Enter MS1 Concede 40 10 Monopolist is strong E1 Do nothing Stay out MS1 10 50 Chance Fight - 20 10 Enter MW1 Concede 40 40 E2 1-Ps Monopolist is weak Do nothing Stay out MW2 10 80 a. The above diagram illustrate the payoffs between entrant, strong monopolist and weak monopolist (without signal). Find out the Bayesian Nash Equilibrium if the probability of facing a strong monopolist is 0.4, the cost to send signal for the weak monopolist is 20 and for the strong monopolist is 0. (14 marks) Question 4 (26 marks) Entrant Monopolist Fight -20 30 Ps Enter MS1 Concede 40 10 Monopolist is strong E1 Do nothing Stay out MS1 10 50 Chance Fight - 20 10 Enter MW1 Concede 40 40 E2 1-Ps Monopolist is weak Do nothing Stay out MW2 10 80 a. The above diagram illustrate the payoffs between entrant, strong monopolist and weak monopolist (without signal). Find out the Bayesian Nash Equilibrium if the probability of facing a strong monopolist is 0.4, the cost to send signal for the weak monopolist is 20 and for the strong monopolist is 0. (14 marks)