Suppose Firm 1 thinks that there is a 30-percent chance that Firm 2 will not invest.In this case,Firm 1's expected payoff from investing is 0.3×(-100)+0.7×(20)=-16 Its expected payoff if it doesn't invest is 0.3×(0)+0.7X(-10)=-7. In this case,firm 1 will choose not to invest.  Suppose Firm 1 thinks that there is a 30-percent chance that Firm 2 will not invest. In this case, Firm 1’s expected payoff from investing is 0.3×(-100) + 0.7 ×(20) = -16 Its expected payoff if it doesn’t invest is 0.3×(0) + 0.7 ×(-10) = -7. In this case, firm 1 will choose not to invest