2. Question Two students are working on a project together. If both students devote more effort to the project, they are both better off. For any given effort of one of the students, the return to the other student's effort first increases, then decreases. Specifically, an effort level is a non- negative number. Student l's preferences are represented by the payoff function a(6+a2-a1) and Student 2's preferences by the payoff function a2(6+a;-a2) where a, is Student l's effort level and az is Student 2's. i) Assume that students choose their effort levels simultaneously. Find the Nash equilibrium and equilibrium payoffs in this game. ii) Assume that first Student 1 chooses his effort level, Student 2 observes Student l's effort and chooses his effort level. Find the subgame perfect Nash equilibrium, equilibrium effort levels and payoffs of this game. Compare the equilibrium effort levels and payoffs in Part (i) and (ii)