Figure 9-E
Two cigarette manufacturers (Firm A and Firm B) are faced with lawsuits from states to recover the health care-related expenses associated with cigarette smoking. Both cigarette firms have evidence that indicates that cigarette smoke causes lung cancer (and other related illnesses). State prosecutors do not have access to the same data used by the cigarette manufacturers, and thus will have difficulty recovering full costs without the help of at least one tobacco firm's evidence. Each firm has been presented with an opportunity to lower their liability in the suit if they cooperate with attorneys representing the states.

-Refer to Figure 9-E.If both firms follow a dominant strategy, Firm B's profits (losses) will be:

Question

Figure 9-E
Two cigarette manufacturers (Firm A and Firm B) are faced with lawsuits from states to recover the health care-related expenses associated with cigarette smoking. Both cigarette firms have evidence that indicates that cigarette smoke causes lung cancer (and other related illnesses). State prosecutors do not have access to the same data used by the cigarette manufacturers, and thus will have difficulty recovering full costs without the help of at least one tobacco firm's evidence. Each firm has been presented with an opportunity to lower their liability in the suit if they cooperate with attorneys representing the states.
 
-Refer to Figure 9-E.If both firms follow a dominant strategy, Firm B's profits (losses) will be:

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The Answer of Figure 9-E
Two cigarette manufacturers (Firm A and Firm B) are faced with lawsuits from states to recover the health care-related expenses associated with cigarette smoking. Both cigarette firms have evidence that indicates that cigarette smoke causes lung cancer (and other related illnesses). State prosecutors do not have access to the same data used by the cigarette manufacturers, and thus will have difficulty recovering full costs without the help of at least one tobacco firm's evidence. Each firm has been presented with an opportunity to lower their liability in the suit if they cooperate with attorneys representing the states.
 
-Refer to Figure 9-E.If both firms follow a dominant strategy, Firm B's profits (losses) will be:

Figure 9-E Two Cigarette Manufacturers (Firm a and Firm B) Are Faced