If ExxonMobil invests in Venezuela's oil fields, it runs the risk that Venezuela will later partially nationalize the assets The payoffs are represented in the game tree illustrated in the figure to the right. Nationalize (24, Suppose that the parties could initially agree to a binding contract that Venezuela would pay ExxonMobil x dollars if it nationalizes the oil fields. How large does x have to be for ExxonMobil to invest in Venezuela? Government Venezuela -(60, Don't nationalize ExxonMobil The value of x would have to be at least equal to $ ExxonMobil to invest in Venezuela (Enter your response as a whole number) for Elsewhere (30,

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If ExxonMobil invests in Venezuela's oil fields, it runs the risk
that Venezuela will later partially nationalize the assets.
The payoffs are represented in the game tree illustrated in
the figure to the right
Nationalize
(24,96)
Suppose that the parties could initially agree to a binding
contract that Venezuela would pay ExxonMobil x dollars if it
nationalizes the oil fields. How large does x have to be for
ExxonMobil to invest in Venezuela?
Government
Venezuela
(60,60)
Don't nationalize
ExxonMobil
The value of x would have to be at least equal to $ for
ExxonMobil to invest in Venezuela (Enter your response as
a whole number)
Elsewhere
(30,0)
Transcribed Image Text:If ExxonMobil invests in Venezuela's oil fields, it runs the risk that Venezuela will later partially nationalize the assets. The payoffs are represented in the game tree illustrated in the figure to the right Nationalize (24,96) Suppose that the parties could initially agree to a binding contract that Venezuela would pay ExxonMobil x dollars if it nationalizes the oil fields. How large does x have to be for ExxonMobil to invest in Venezuela? Government Venezuela (60,60) Don't nationalize ExxonMobil The value of x would have to be at least equal to $ for ExxonMobil to invest in Venezuela (Enter your response as a whole number) Elsewhere (30,0)
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