General Scooters has decided to replace its old assembly line with a new one that makes extensive use of robots. There are two contractors who would be able to build the new assembly line. General Scooters's industrial spies and engineers have done some exploratory researchof their own on the costs of building the new assembly line for each of the two contractors. They have discovered that for each of them, this cost will take one of three possible values H, M, and L, where H >M > L. 
Unfortunately, General Scooters has not been able to determine whether the costs of either of the bidders are H, M, or L. The best information that General Scooters's investigators have been able to give it is that for each contractor the probability is 1/3 that the cost is H, 1/3 that the cost is M, and 1/3 that the cost is L and that the probability distribution of costs is independent between the two contractors. Each contractor knows its own costs but thinks that the other's costs are equally likely to be H, M, or L. General Scooters is confident that the contractors will not collude. 
General Scoooters accept sealed bids from the two contractors for constructing the assembly line and that it announce that it will award the contract to the low bidder and will pay the low bidder the amount bid by her.
Suppose a contractor will bid M if her costs are L, and she will bid H if her costs are H or M. If contractors use this strategy, what is the expected cost of the project to General Scooters? 
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