If you were the potential entrant would you enter?.
You are considering entering a market serviced by a monopolist. You currently earn $0 economic profi Show more You are considering entering a market serviced by a monopolist. You currently earn $0 economic profits while the monopolist earns $5. If you enter the market and the monopolist engages in a price war you will lose $5 and the monopolist will earn $1. If the monopolist doesnt engage in a price war you will each earn profits of $2. a. Write out the extensive form of the above game. b. There are two Nash equilibria for the game. What are they? c. Is there a subgame perfect equilibrium? Explain. d. If you were the potential entrant would you enter? Explain why or why not. Show less
If you were the potential entrant would you enter?
