Game Theory

Given,

Firm A and Firm B are the two players: Firm A's strategy is as follows: Launch Designs, but do not launch Firm B's strategy is as follows: Copy designs, but do not copy

Given the fact that firm B is a well-known brand, we assume the following payoffs for company B: When you copy designs, you get a 5 When there is no release of designs or when there is no release of designs, duplicates = 2

Firm A Payouts are considered to be in accordance with the following information: When the new design is released, and the firm B copies are made, the total number of copies is two. In the event that firm B does not copy = 3 When Firm A does not introduce a new design, the result is zero.

The game is represented in an extensive form as attached.

Firm A Launch Do not launch Firm B Copies Do not copies (2 ,5) (3 , 2) (0 , 2)