Problem 13.1.1 Show the payoff matrix and explain the reasoning in the prisoners' dilemma example where Larry and Duncan, possible criminals, will get one year in prison if neither talks; if one talks, one goes free and the other gets five years; and if both talk, both get two years. (Note: The payoffs are negative because they represent years in jail, which is a bad.) Problem 13.1.4 Suppose Procter & Gamble (PG) and Johnson & Johnson (JNJ) are simultaneously considering new advertising campaigns. Each firm may choose a high, medium, or low level of advertising. What are each firm's best responses to its rival's strategies? Does either firm have a dominant strategy? What is the Nash equilibrium in this game? (See Solved Problem 13.1.) PG High Medium Low 1 3 High 3 5 4 5 INJ Medium 2 4 6 5 6 5 Low 3 5 7 Problem 13.2.1 In a repeated game, how does the outcome differ if firms know that the game will be (a) repeated indefinitely, (b) repeated a known, finite number of times, (c) repeated a finite number of times but the firms are unsure as to which period will be the last period