Suppose that three firms are deciding whether to enter a market or not and each is...

Suppose that three firms are deciding whether to enter a market or not and each is interested in its proÖt minus entry costs. Call these firms A,B,C. If only one firm enters, suppose its profit is 500; if two enter it is 200 for each and if all three enter, it is 140 for each. The entry costs for A,B,C are respectively 80, 120 and 150. Firms simultaneously decide whether to enter or not enter (a firm that does not enter gets a payoff of 0). What are the Nash equilibria (there could be more than one) of this game in pure strategies?

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Rahul Sunny answered 1 year ago

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