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Two tech companies, Dhakatech and Rajtech are competitors. Dhakatech is deciding whether to enter (Enter) or stay out (Stay Out) of the software market. Rajtech
Two tech companies, Dhakatech and Rajtech are competitors. Dhakatech is deciding whether to enter (Enter) or stay out (Stay Out) of the software market. Rajtech can observe Dhakatech's choice and also choose to enter or stay out of the market If Rajtech chooses to stay out of the market after Dhakatech enters, Dhakatech will get a payoff of 10,000 and Rajtech will get a payoff of zero. If Rajtech enters the market after Dhakatech chooses to stay out, Rajtech will get a payoff of 10,000 and Dhakatech will get a payoff of zero. If both firms choose to stay out, they each get a payoff of zero. If Rajtech chooses to enter the market after Dhakatech chooses to enter, it can decide to compete aggressively (Aggressive) or softly (Soft) with Dhakatech. If Rajtech competes aggressively both firms get a payoff of 5,000. If Rajtech competes softly it gets a payoff of 2,000 while Dhakatech gets a payoff of 8,000. (a) (b) Depict the game in extensive form. Find a Nash equilibrium of the game using backward induction, explaining the steps
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