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Consider the following anti-coordination game in Figure 1 played by three potential entrants seeking to enter into a new industry, such as the development of
Consider the following anti-coordination game in Figure 1 played by three potential entrants seeking to enter into a new industry, such as the development of software applications for smartphones. Every firm (labeled as A, B, and C) has the option of entering or staying out (i.e., remain in the industry they have been traditionally operating, e.g., software for personal computers). The normal form game in figure 1 depicts the market share that each firm obtains, as a function of the entering decision of its rivals. Firms simultaneously and independently choose whether or not to enter. As usual in simultaneous-move games with three players, the triplet of payoffs describes the payoff for the row player (firm A) first, for the column player (firm B) second, and for the matrix player (firm C) third. Firm B Firm B Firm A Firm A Enter Stay Out Enter Stay Out Enter Stay Out 14,24,32 30,16,24 8,30,27 13,12,50 Enter Stay Out 16,26,30 31,23,14 31,16,24 14,26,32 Enter Stay Out Firm C Figure 1. Normal-form representation of a three-players game a) Find the set of strategy profiles that survive the iterative deletion of strictly dominated strategies (IDSDS). b) Is the equilibrium you found using this solution concept unique? Consider the following anti-coordination game in Figure 1 played by three potential entrants seeking to enter into a new industry, such as the development of software applications for smartphones. Every firm (labeled as A, B, and C) has the option of entering or staying out (i.e., remain in the industry they have been traditionally operating, e.g., software for personal computers). The normal form game in figure 1 depicts the market share that each firm obtains, as a function of the entering decision of its rivals. Firms simultaneously and independently choose whether or not to enter. As usual in simultaneous-move games with three players, the triplet of payoffs describes the payoff for the row player (firm A) first, for the column player (firm B) second, and for the matrix player (firm C) third. Firm B Firm B Firm A Firm A Enter Stay Out Enter Stay Out Enter Stay Out 14,24,32 30,16,24 8,30,27 13,12,50 Enter Stay Out 16,26,30 31,23,14 31,16,24 14,26,32 Enter Stay Out Firm C Figure 1. Normal-form representation of a three-players game a) Find the set of strategy profiles that survive the iterative deletion of strictly dominated strategies (IDSDS). b) Is the equilibrium you found using this solution concept unique
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