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What is game theory, and how do businesses use games? In your Managerial Economics textbook, we consider a sequential-move game in which an entrant is

What is game theory, and how do businesses use games?

In yourManagerial Economicstextbook, we consider a sequential-move game in which an entrant is considering entering an industry in competition with an incumbent firm (see Figure 15-1). There are several possibilities of how this sequential game will be played. We want to use the Froeb rule of look ahead and reason back.

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For your discussion post, use Figure 15-1 from the textbook as your starting point to address the following:

  • Can, and how does, the entrant succeed?
  • Is the incumbent ever in control of this game?
  • You may wish to review the old game known as Duopoly, as well as Antoine-Augustin Cournot, to help inform your post.

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