Suppose that currently there are no airlines serving the city of South Podunk. Both Accommodating Airlines and Friendly Flyers are looking to enter that market. (They are the only two.) The figure shows in extensive form the possible outcomes of the two firms' decisions. The payoffs represent, in thousands per month, the profit (or loss) the firm will realize from its decision. What is the solution to this extensive form game? 
Definitions:
Perfect Substitutes
Goods that can be used in place of each other with no loss of utility by the consumer.
Perfect Complements
Goods that are always used together in fixed proportions, where an increase in demand for one leads to a corresponding increase in demand for the other.
Initial Endowment
The initial allocation of resources, goods, or wealth that individuals or firms possess before engaging in exchanges or production.
Pareto Efficient Allocations
refers to an economic situation where no individual can be made better off without making someone else worse off.
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