Subgame Perfect Nash Equilibrium: Suppose that the trade war between the United States and China can be summarized as the game shown below. The United States (Player 1) decides whether or not to declare a trade war against China in stage 1. If no war is being declared, China (Player 2) and the United States will then simultaneously decide whether or not to adopt a more open trade policy toward each other in stage 2. If a war is being declared, it is up to China to determine if it will open its market to the United States.

1. (5 points) On the game tree, indicate where the subgames are. Label them clearly. 2. The United States' strategies: (a) (8 points) List the United States' strategies for this game (the W that starts from the root). (b) (2 points) Indicate the condition or the meaning of each component in its strategies. 3. China strategies: (a) (8 points) List China's strategies for this game (the nonproper subgame that starts from the root). (b) (2 points) Indicate the condition or the meaning of each component in its strategies. 4. (10 points) Construct the payoff table and nd the Nash equilibrium (or equilibria) for this game (the nonproper subgame that starts from the root). REMEMBER TO SHOW YOUR WORK BY UNDERLYING THE BEST RESPONSES IN THE PAYOFF TABLE