Question
Dacsee, Jom Rides, and MyCar are three ride-sharing services that are considering expanding their services to the Pahang region of Malaysia. They will decide one
Dacsee, Jom Rides, and MyCar are three ride-sharing services that are considering expanding their services to the Pahang region of Malaysia. They will decide one at a time whether to enter in the following order: Dacsee, Jom Rides, then MyCar.
If only one firm enters, expected revenues to that firm are $50M; if two firms enter, expected revenues per firm are $25M, and if all three enter, $15M. All three firms face entry costs of $20M.
a. Draw the game tree that represents the firms' entry decisions, showing the payoffs (profits) for each of the three firms at each possible outcome.
b. What will be the equilibrium outcome?
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