Considering entering industry in completion with incumbent

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We considered a sequential move game in which an entrant was considering entering an industry in completion with an incumbent firm, Consider now that the entrant, if fought, has the possibility of withdrawing from the industry (at a loss of 1 for the entrant and a gain of 8 for the incumbent), What is the equilibrium of the game? Discuss if the entrant is better off with or without the ability to withdraw.

Reference no: EM131004780

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