Question
Vaxiboost is a new, generic pharmaceutical product sold by Sanitex and Toptabs. Both are considering their pricing decisions for the next year. Payoffs under different
Vaxiboost is a new, generic pharmaceutical product sold by Sanitex and Toptabs. Both are considering their pricing decisions for the next year. Payoffs under different combinations of decisions are as follows:
If both Sanitex and Toptabs price high, both will receive profits of 3m in the coming year.
If Sanitex prices high and Toptabs prices low, Sanitex will receive profits of 0.7m and Toptabs will receive profits of 6m.
If Sanitex prices low and Toptabs prices high, Sanitex receceive profits of 5m and Toptabs will receive profits of 2m.
If both Sanitex and Toptabs price low, both will receive profits of 0.1m.
Would the outcome of the game change if Toptabs published its prices first? Draw a suitable diagram showing all three subgames and explain your answer in full.
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