(Solution) - Economists Orley Ashenfelter and David Bloom studied disputes th -(2025 Original AI-Free Solution)

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Economists Orley Ashenfelter and David Bloom studied disputes that were brought to arbitration between management and workers? unions. They found that being represented by a lawyer increased that side?s chance of winning its arbitration case. The payoff table (listing the union?s chance of winning the arbitration case) summarizes their empirical findings.

For instance, according to the upper-left entry, if neither side uses a lawyer, the union is expected to prevail in the arbitration case 56 percent of the time.
a. Determine each side?s optimal action and the resulting outcome.
b. Does this situation constitute a prisoner?s dilemma? Explainbriefly.