Consider the following negotiation between two firms to form a joint venture. • Firm 1 proposes an ownership share x in [0, 1] for Firm 2. That is, x can be any number between 0 and 1 including 0 and 1 • Firm 2 specifies the minimum ownership share y in [0, 1] that she can accept. That is, y can be any number between 0 and 1 including 0 and 1. • Parties reach an aggrement if x >= y and x < 0.5 That is, Firm 1’s offer must be at least as good as the minimum share Firm 2 is asking. Furthermore, Firm 2 must be the junior owner and hence cannot have an ownership share more than 50%. • If these two conditions are not satisfied, then there is no aggreement and F1 receives 0.25 whereas F2 receives 0.10. The payoffs of players are described below. u1(x, y) = { 1 − x if x >= y and x < 0.5 0.25 otherwise u2(x, y) = { x if x >= y and x < 0.5 0.10 otherwise 10 a) (8 points) Is x = 0.30 and y = 0.25 a Nash Equilibrium? Explain formally. u1(x, y) = { 1 − x if x >= y and x < 0.5 0.25 otherwise u2(x, y) = { x if x >= y and x < 0.5 0.10 otherwise