Two athletes of equal ability are competing for a prize of. Each is

deciding whether to take a dangerous performance-enhancing drug. If

one athlete takes the drug and the other does not, the one who takes

the drug wins the prize. If both or neither take the drug, they tie and

split the prize. Taking the drug imposes health risks that are equivalent

to a loss of X dollars.

a) Draw a payoff matrix describing the decisions the athletes face.

b) For what X is taking the drug the Nash equilibrium?

c) Does making the drug safer (that is, lowering X) make the

athletes better or worse off? Explain.