In an extension of Exercise U9, Monica and Nancy need to decide which (if either) of them will commit to an effort level first. To do this, each of them simultaneously writes on a separate slip of...

In an extension of Exercise U9, Monica and Nancy need to decide which (if either) of them will commit to an effort level first. To do this, each of them simultaneously writes on a separate slip of paper whether or not she will commit first. If they both write “yes” or they both write “no,” they choose effort levels simultaneously, as in Exercise U10 in Chapter 5. If Monica writes “yes” and Nancy writes “no,” they play the game in part (a) of Exercise U9 above. If Monica writes “no” and Nancy writes “yes,” they play the game in part (c).

(a) Use the payoffs to Monica and Nancy in parts (b) and (c) in Exercise U9 above, as well as those in Exercise U10 in Chapter 5, to construct the game table for the first-stage paper-slip decision game.

(b) Find the pure-strategy Nash equilibria of this first-stage game.