The Bureau of Land Management (BLM) is considering: DBD leasing the land to a DED company for oil extraction. Oil 1019 extraction will bring DBD $10 million in profit. After the oil extraction, DBD can properly reclaim the rig and return it, which will cost $2 million. If DBD does not return the land, BLM will have to assume its liability, at a cost of $3 million. (DBD is a small company, so if you are sued for damages If DBD fails to meet its responsibilities, BLM is in the process of paying DBD $3 million in bonds to cover the costs. Assume the rental price is $5 million. , 1. Explain why this situation could be a master agent problem. who is the owner Are you an agent? 2. Using the master-agent problem as a new game and using backward induction to solve the Nash Equilibrium save The Bureau of Land Management (BLM) is considering: DBD leasing the land to a DED company for oil extraction. Oil 1019 extraction will bring DBD $10 million in profit. After the oil extraction, DBD can properly reclaim the rig and return it, which will cost $2 million. If DBD does not return the land, BLM will have to assume its liability, at a cost of $3 million. (DBD is a small company, so if you are sued for damages If DBD fails to meet its responsibilities, BLM is in the process of paying DBD $3 million in bonds to cover the costs. Assume the rental price is $5 million. , 1. Explain why this situation could be a master agent problem. who is the owner Are you an agent? 2. Using the master-agent problem as a new game and using backward induction to solve the Nash Equilibrium save