Question: 1. Two risk neutral players enter a game in which they can win a prize, P. Their probability of winning depends on the amount of

1. Two risk neutral players enter a game in which they

1. Two risk neutral players enter a game in which they can win a prize, P. Their probability of winning depends on the amount of money they spend. Player 1 is the high ability player and wins with probability p1=ax1/(x1+x2), where x1 and x2 are the amounts of money spent by player 1 and player 2 respectively and >1. a) Find the Nash equilibrium spending levels. b) What is player 1 's probability of winning at equilibrium

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