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Consider the following entry game. Firm 1 11 N1 Firm 2 E2 N2 E2 N2 Firm 1 5 N P1 A1 P1 A1 O N
Consider the following entry game. Firm 1 11 N1 Firm 2 E2 N2 E2 N2 Firm 1 5 N P1 A1 P1 A1 O N 2 3 3/2 2 N . Entry deterrence (1) . Entry (E) / no entry (N) . Passive(P)/Aggressive (A) At the equilibrium: Highlight Firm 1's payout 5/2 2 3/2 0 5
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