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Higher payoff in the sequential game

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Reference no: EM133125647

Suppose that two firms compete and can choose to be aggressive or passive with payoffs as follows.

 

Firm 2 Aggressive

Firm 2 Passive

Firm 1 chooses Ag

25,9

33,10

Firm 1 chooses Passive

30,13

36,12

Firm 2 gains a higher payoff in the sequential game where it moves first compared to the sequential game where it moves second.

Reference no: EM133125647

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