Reference no: EM133126255

Two cyclists in a bicycle race have the strength to pull away from all the other cyclists in the pack. They can decide either to pull away unilaterally or to pull away conditionally. If they pull away unilaterally, they compete evenly for the victory in the race. If they pull away con- ditionally, it means that they keep their eye on the opponent and if the opponent pulls away unilaterally, they follow in the wind stream, riding comfortably in second place. This is known in the racing lingo as draft- ing. The follower in this position can win the race in the end, because wind resistance tires the racer riding in front, and the racer riding in second place easily passes the leader in the sprint to the finish. If both racers decide to follow conditionally, they remain in the pack, squan- dering their advantage, and both have in the end only a 10% chance of winning the race. What does game theory suggest?