Question 2 [This game has similarity with Exercise 4.1a - not necessarily in terms of payoff but in terms of information structure] Boeing is the sole supplier of aircras to all Asian airlines. Airbus is deciding whether to enter the Asian market and compete with Boeing. 1 Airbus can take an {a} aggressive entry strategy which we refer to as Er. 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 to as int]. I Boeing can decide to engage in price war {P} or share {5} the market with Airbus o Airbus chooses first between E., E2, and S after which Boeing chooses between P and S. {i} If Airbus stays out of the market, Boeing gets 4, Airbus gets ID (ii) If Airbus chooses E. or E; but Boeing choosm P, each gets (- 1} {iii} If Airbus chooses E1 and Boeing chooses 3, Airbus gets 3, Boeing gets 1 {iv}If Airbus chooses E2 and Boeing choosm S, Airbus gets 2, Boeing gets 2 o Moving second1 Boeing knows whether Airbus has chosen to stay out or enter, but it does not know whether Airbus has chosen E. or E2. [Hint dunk of information set] [a] {2 marks} Draw the relevant game tree associated the sequential garne described above. Clearly label nodesfmforrnation sets, who moves at each nodefinforrnation 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) {h marks} Consider the two Nash equilibria found in 2a. 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]