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Consider a game with two firms thinking about entering the market. If neither one enters they both get 0. If both enter, both get 5.
Consider a game with two firms thinking about entering the market. If neither one enters
they both get 0. If both enter, both get 5. If one enters they get 9 and the other player gets 0 A. First consider what happens when the firm simultaneously decide whether to enter the market. Draw
the table. What are the pure strategy equilibria? B. What is the mixed strategy equilibrium? C. Now consider what happens when firm one decides whether to enter before the firm 2 decides. Draw
the game tree. Find the subgame perfect equilibrium
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