Firm B Is the Incumbent Facing Potential Entry from Its

question 81

Multiple Choice

Firm B is the incumbent facing potential entry from its rival; Firm A.Firm A's strategies consist of {Entry, Stay Out}.Firm B's strategies are then {hard if entry; hard if stay out; soft if entry; soft if stay out}.Find the non-subgame Nash equilibrium to this game, if one exists.

• A)Firm A plays {Stay Out}; Firm B plays {Hard if Entry}.
• B)Firm A plays {Entry}; Firm B plays {Hard if Entry}.
• C)Firm A plays {Entry}; Firm B plays {Soft if Entry}.
• D)There is no non-subgame Nash equilibrium to this game.

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