Synergies: Two division managers can invest time and effort in creating a better working relationship. Each invests e i ≥ 0, and if both invest more than both are better off, but it is costly for each manager to invest. In particular the payoff function for player i from effort levels (ei, ej) is vi (ei, ej) = (a + ej) ei− ei^2 all th i and j are subscripts
a. What is the best-response correspondence of each player?
b. In what way are the best-response correspondences different from those in the Court not game? Why?
c. Find the Nash equilibrium of this game and argue that it is unique.