Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Transcribed Image Text:Two companies are playing the following entry game:
Firm 2
Do Not
Enter
O 1/3
2/5
O 2/3
O 1/5
Enter
0
1
Do Not Enter
Firm 1
0
0
0
-2
Enter
In mixed-strategies Nash equilibrium Firm 1 enters the market with probability of:
1
-2
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