Question
1. What is the expected salary for each player as a function of p if they both choose to take PEDs?
2. Draw the normal form of this game (i.e., the game matrix). Hint: payoffs will be in terms of the players' expected salary.
3. Assume p = 0.25. Find all the pure strategy Nash Equilibria of this game.
4. Suppose the MLB wants to get rid of PEDs. To do so, they enhance their screening for PEDs, which increases p. What is the lowest level of p where both players choose not to take PEDs in the equilibrium?
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