5. Suppose you have two job offers. Big Inc. will pay you $75,000. Small Ltd. pays $40,000 with profit sharing. You believe there are three possible states of the world. There is a 30% chance demand will be low and no profits will be shared. There is a 30% chance demand will be high and $80,000 will be shared. Otherwise demand will be medium and $40,000 will be shared. You are risk neutral and that other than pay the two jobs are the same to you. a) Draw the normal form game against nature. b) Which job is better? c) Suppose you can acquire information that will tell you for certain whether or not demand will be low. If demand is not low, it does not tell you whether it is medium or high. What is the value of such information to you?

Choose two companies in the same industry in Canada. Read the instructions for question 10.2 before making your choice(s), as you will use the same firms for questions 10.1 and 10.2. In one paragraph, describe your choice of firms and industry, noting in particular what you hope to learn from your financial statement analysis. Provide URLs to the financial statements on the firm's website. *Marks will be awarded choosing less common firms/industry. Common and frequently chosen firms and industries will receive fewer marks in this regard. Summarize each firm's income statement and balance sheet for the last two fiscal years into the categories below. Complete the attached tables (an Excel template is available in the Assignment 3 dropbox area of the course website) with this information. You may cut and paste into and from Microsoft Excel for this assignment.

8. Collusive outcome versus Nash equilibrium Consider a remote town in which two restaurants, All-You-Can-Eat Café and GoodGrub Diner, operate in a duopoly. Both restaurants disregard health and safety regulations, but they continue to have customers because they are the only restaurants within 80 miles of town. Both restaurants know that if they clean up, they will attract more customers, but this also means that they will have to pay workers to do the cleaning. If neither restaurant cleans, each will earn $13,000; alternatively, if they both hire workers to clean, each will earn only $10,000. However, if one cleans and the other doesn't, more customers will choose the cleaner restaurant; the cleaner restaurant will make $18,000, and the other restaurant will make only $6,000. Complete the following payoff matrix using the information just given. (Note: All-You-Can-Eat Café and GoodGrub Diner are both profit-maximizing firms.) All-You-Can-Eat Café Cleans Up Doesn't Clean Up $ GoodGrub…

16-1 Newspaper Bargaining Two equal-sized newspapers have an overlap in circulation of 10% (10% of the subscribers subscribe to both newspapers). Advertisers are willing to pay $10 to advertise in one newspaper but only $19 to advertise in both, because they’re unwilling to pay twice to reach the same subscribers. What’s the likely bargaining negotiation outcome if the advertisers bargain by telling each newspaper that they’re going to reach an agreement with the other newspaper, so the gains to reaching agreement are only $9? Suppose the two newspapers merge. What is the likely post-merger bargaining outcome? these would be most advantageous from a bargaining position?