Payoffs represent profits in millions of dollars. In this simultaneous game, TriStar and New Line Cinema both decide the genre of their summer movie release. TriStar prefers to release a superhero movie and New Line Cinema releases a comedy. TriStar enters into an irrevocable contract that will provide penalty payments to theater chains if it releases a summer comedy. These penalty payments serve as a credible commitment to TriStar's desire to release a superhero movie. How large do these penalty payments have to be to convince New Line Cinema that TriStar will release a superhero movie

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