Two fishing people harvest the fish in a lake, which has 120 fish in one year. They receive an annual payoff of Ui= SiFi, where Si = spring catch and Fi= fall catch, for fisher i. Each fisher chooses their spring catch; in the fall, the remaining fish must be shared equally by them.

a) What is the best payoff each fisher can earn individually? What is the best payoff each can get cooperatively?

b) Draw the game in 2x2 strategic form. What general terms denote the various outcomes found above? What type of game is this and what other games have similar adverse results? Why do such games pose a dilemma?

e) How high must the probability be that the game will be played again in the next period, in an indefinite series of periods, for players to cooperate in the first round? (If you use a formula define its terms). What is this probability and this equilibrium called?