This question was answered but very minimally, could not read handwriting at all... if you could answer the questions in bold below, that would be wonderful.

Firm V Firm Z

Firm V Beaded, Firm Z Contoured 45 34

Firm V Beaded, Firm Z Rough 37 36

Firm V Plated, Firm Z Contoured 46 41

Firm V Plated, Firm Z Rough 35 52

Firm V Mixed, Firm Z Countered 53 29

Firm V Mixed, Firm Z Rough 39 38

Firm V has the ability to make an irrevocable binding commitment for Firm V to make a side payment of 10 to Firm Z, if and only if Firm Z chooses the strategy Contoured when firm Z makes a strategy choice in the game shown above. If Firm V decides to commit to the side payment, Firm Z knows that it will receive the side payment of 10 if it chooses Contoured. (The side payment will be settled at the same time as the payoffs are made at the end of the game.) Firm V must decide whether or not to commit to making this side payment.

- After Firm V has announced to everyone whether or not it will commit to the side payment offer, Firm Z can remove the strategy choice Mixed from the set of possible strategies that Firm V could choose. Firm Z must decide whether or not to prevent Firm V from being able to choose Mixed.

- Once those two decisions are made and announced to everyone, the game of selecting design strategies is then played, using any changes in structure from those two decisions. This game is still simultaneous, non-cooperative, one-shot.

- For this game, if the game has one Nash equilibrium in pure strategies, then each firm will select its Nash-equilibrium strategy. If the game has no Nash equilibrium in pure strategies, or if the game has two or more Nash equilibriums in pure strategies, then the game will actually not be played; instead, each firm will receive a payoff of 40 in lieu of playing the game. (And, if the game is not actually played, then there will be no side payment.

Answer the following questions:

1. Should Firm V commit to making the side payment if and only if firm Z chooses Contoured, or should Firm V offer no side payment?

2. Should Firm Z remove the strategy Mixed from Firm Vs possible strategies, or should Firm Z allow Firm V to consider and possibly to choose the strategy Mixed?

3. What is the outcome of the overall game?

Explain why you reach your conclusions.