The following is the model you should study in the totlowmg 4 questions. [if necessary. round your answers to the third decimal point] There is an election with two candidates: A and B. Candidate B has valence 6' E {0, 1}. Candidate A is committed to a platform pA = El. Candidate B instead can choose any platform pa E {0, 1}. Voters prefer platform 0 but they also care about the \"valence" of the candidates. ln particular, if they eiect candidate A they get a payoff of 0. If they elect candidate Bthey get a payoff equal to *p11 + k9. With J: > 1. A lobby proposes to candidate Bthe following deal: the lobby will nance B's campaign fora value ofm ifB runs on platform pa = 1. Financing a campaign provides no direct benet for the candidate and the campaign itself contains no direct information about any quality or valence of the candidate. Everybody knows that candidate B had valence 9 = l with probability 'K = 1/3. Both the candidate and the lobby observe 9 but the voter does not. The voter observes whether the lobby and the politician agreed on a campaign and the size of it: i.e.r mm However. with probability a' E (D, 1] the voter may also directty observe Ejust before the election (i.e.. with probability 1 7 athe voters does not observe 9]. FIRST QUESTION: Suppose that the voters have observed 0 = D and that the pg = 1. what would the voters do? Select one: C) a. Elect candidate A. O b. Elect candidate B. O c. They are indifferent between the Mo candidates. 0 d. They believe that candidate B has high valence. SECOND QUESTlON: Suppose that as a voter you know that the lobby and candidate Bwould agree on some money In with probabilityD if 6' = Band probability 1/5 if 9 = 1. Suppose you do not observe 9 but you see that candidate B mns a campaign that costs Hi. What should you believe the probabilityr that 6' = 1 to be? |:| THIRD QUESTION: Using the same information as in the previous question. suppose you do not observe 8 but you see that candidate B DOES NOT run a campaign that costs In. What should you believe the probability that 9 : Ito be? |:| FOURTH QUESTION: As a campaign analyst. you are asked what you predict m should be. You know that 6' = 1 and that the probability that the voters will observe 9 before the election is cr = 1/10. The lobby values a victory of a candidate on platform 1 equal to 20. As an expert you reason that the campaign may work only as a "burning money" advertising campaign. Therefore, the campaign {m} should so large that the voters know that the lobby would never spend so much on a candidate with 9 = 0. Calculate the minimum amount of m that satises this constraint E