1. The North Atlantic Treaty Organization (NATO) members (primarily western Europe and North America) have pledged to spent at least 2% of GDP on national defense. This amount was agreed to by all member countries primarily as a deterrent to the Soviet Union. This agreement and the 2% amount is are both important for the national security of all NATO countries. However, despite the agreement, approximately half of NATO countries fail to meet their commitment.

1. Using game theory as the basis for your answer, explain the dynamics of this situation. (5)

1. Any suggestions, based on our studies, that the adhering countries could use to get the non-adhering countries to honor their commitments? (5)