1. There are N firms in an industry. Each firm can try to convince the government to grant them a subsidy. Let h???? denote the number of hours of effort that firm ???? spends lobbying the government while the cost of lobbying is ????h2, where ???? is a constant. When the hours of effort by the firms are (h1 , ... , h???? ), the value of the subsidy granted to each firm is ???? ???? h???? + ????(???? h????), where ???? and ???? are known constants. The firms decide simultaneously and independently how many hours they will spend lobbying the government. For what value of ???? does each firm have a strictly dominant strategy? What is the strictly dominant strategy, and the Nash equilibrium in this case.