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Two candidates are competing in a political race. Each candidate ? can spend ?? = 0 on adds that reach out to voters, which in turn increases the probability that candidate ? wins the race. Given a pair of spending choices (?1? ?2), the probability that candidate ? wins is given by ?? ?1+?2 . If neither spends any resources then each wins with probability 1 2 Each candidate values winning at a payoff of ? ? 0, and the cost of spending ?? is just ??. (a) Given two spend levels (?1? ?2), write the expected payoff of a candidate ?(b) What is the function that represents each player’s best response function??
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