There are two firms, A & B. A can choose either of acceptable price (H) or attack price (L) while B can choose either of enter (E) or not-enter (N) after A's decision. The payoff is given as follows: Choices Player A HHLL Player B Ν Ε Ν Ε

There are two firms, A & B. A can choose either of acceptable price (H) or attack price (L) while B can choose either of enter (E) or not-enter (N) after A's decision. The payoff is given as follows: Choices Player A HHLL Player B Ν Ε Ν Ε

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Oligopoly

Section: Chapter Questions

Problem 5CQQ

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There are two firms, A & B. A can choose either of acceptable price (H)
or attack price (L) while B can choose either of enter (E) or not-enter
(N) after A's decision. The payoff is given as follows:
Choices
Player A
H
HLL
Player B
N
E
NE
Payoff
Player A
8
4 5
Player B
6
When player B can NOT know what player A chooses, then draw the
extensive form game, and answer the Nash equilibrium.
T

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