The US and Russia have signed a nuclear no-proliferation agreement to limit arms race. Each country can cooperate or defect now. If both cooperate, their payoff is 1000 each but if both defect, it drops to 600. If one cooperates and the other defects, they receive X and 1000-X respectively, where X represents the payoff of a normal country and 1000-X the payoff of the world leader. The only rational solution is cooperation if X is equal to

1. -200
2. 200
3. 500
4. 700