Question 2 [This game has similarity with Exercise 4.1a - not necessarily in terms of payoff hut in terms of information structure] Bneing is the sole supplier of aircrafts to all Asian airlines. AirbUs is deciding whether to enter the Asian market and compete with Boeing. I Airbus can take an (a) aggressive entry strategy which we refer to as El. AirbUs can also take a (b) soft entry strategy which we refer to as E2. Finally, Airbus can completely {c} stay out of the market which we refer tn as [Hut]. 1 Boeing can decide to engage in price war {P} or share {S} the market with Airbus o Airbus chooses rst between E., E2, and 0, after which Bneing cheeses between P and S. {i} If Airbus stays nut of the market, Boeing gets 4, Airbus gets [1 {ii} If Airbus chnnses E1 or E: but Boeing chnnses P, each gets {- 1} {iii} If Airbus chooses E. and Boeing chooses S, Airbus gets 3, Boeing gets 1 {iv}If Airbus chnnses E1 and Boeing chnnses S, Airbus gets 1, Boeing gets 2 or Moving second, Boeing knows whether Airbus has chosm to stay out or enter, but it does not know whether Airbus has chnsEn E: or E2. [Hint think of information set] {a} {2 marks} Draw the relevant game tree associated the sequential game described above. Clearly label nodesfinforrnation sets, who moves at each nodefinfnnnatinn sets, actions, payoffs {at terminal nodes} [No explanation needed] (b) (2 marks) Draw the payoff matrix for the normal form game associated with the sequential move game described above. State the two Nash equilibria in pure strategies. [No explanation needed] (c) (6 marks) Consider the two Nash equilibria found in 2b. Is any one of them a Perfect Bayesian Equilibrium (PBE)? Explain. In particular, consider each NE and argue why they are or are not part of a PBE. [Note: A complete description of PBE must specify beliefs as a part of description of the equilibrium. ]