The decision tree below describes the game faced by firm H and firm T. The payoffs are profits in million of US$. The SPNE is(are): (Build large, Build large) (Build Small, Build Small) (Build Small, Build Large) (No build, Build Large) (Build Large, No Build)
The decision tree below describes the game faced by firm H and firm T. The payoffs are profits in million of US$. The SPNE is(are): (Build large, Build large) (Build Small, Build Small) (Build Small, Build Large) (No build, Build Large) (Build Large, No Build)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
The decision tree below describes the game faced by firm H and firm T. The payoffs are profits in million of US$.
The SPNE is(are):
|
(Build large, Build large) |
||
|
(Build Small, Build Small) |
||
|
(Build Small, Build Large) |
||
|
(No build, Build Large) |
||
|
(Build Large, No Build) |
Transcribed Image Text:Build
Large
(10 , 10)
T
Build
Small
(14 , 18)
Build
No Build
(22 , 2)
Large
Build
Build
(12 , 8)
Large
Small T
Build
Small
(18 , 14)
No Build
(22 , 6)
No Build
Build
(9 , 18)
(4 , 16)
Large
T
Build
Small
No Build
(10 , 10)
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