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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)

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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)
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)
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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