In a one-shot game, if you advertise and your rival advertises, you will each earn $5 million in profits. If neither of you advertises, your rival will make $4 million and you will make $2 million. If you advertise and your rival does not, you will make $10 million and your rival will make $3 million. If your rival advertises and you do not, you will make $1 million and your rival will make $3 million.
a. Write the above game in normal form.
b. Do you have a dominant strategy?
c. Does your rival have a dominant strategy?
d. What is the Nash equilibrium for the one-shot game?
e. How much would you be willing to bribe your rival not to advertise?