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2. Consider a game with the same players, actions and order of play as in the previous problem (problem 4 of problem set 3), but
2. Consider a game with the same players, actions and order of play as in the previous problem (problem 4 of problem set 3), but where the payoffs are: (C, 2) after E,F,L (0.5 C k, 0.5) after E,F,SI (C, 2.5) after E,A,L (1.5 C k, 1.5) after E,A,SI (0,3) after SO a) For every pair (C, k) E (0,2] x (02], nd the pure-strategy SPE of this game. b) Assume that this game models the interaction between a potential entrant to an industry and an incumbent rm. Explain, in words, the economic intuition for the answer to part a in each of the cases where the subgame-perfect equilibrium is unique. m: Start by giving real-world interpretations for what C and k might represent
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