Play no pm WIRILE LORER the poly of the plant in or "Not invest in 2 observe imm's decision and then decide whether to e

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Play No Pm Wirile Lorer The Poly Of The Plant In Or Not Invest In 2 Observe Imm S Decision And Then Decide Whether To E 1 (29.93 KiB) Viewed 25 times

Play no pm WIRILE LORER the poly of the plant in or "Not invest in 2 observe imm's decision and then decide whether to enter the man and compete or to stay ply investment who involving a cod cost, allows the incumbent to produce output at a lower magna cost than the potential in The peolt (in millions) for each firm under ench scono is shown in the game tree below Invest Not Invest Firm 2 Firm 2 Enter Enter) Stay Out Stay Out 3,-2 5,0 4,1 6,0 - a What is an example of a strategy for Firm 1? Firm 2? Remember, a strategy is a complete contingency plan - What is the are the Pure Strategy Nash Equilibrium equilibria of the game? What are the associated payoff outcomes of the two firms? Hint you can write this game in normal form Activate Window . What is the Backward Induction Nash Equilibrium (BINE) of the game? What are the associated payoff outcomes of the two firmi? . d. How might Firm 2 improve their outcome in this game through the use of a strategic move? That is what sort of pre-commitment, promise or threat