What is the subgame perfect equilibrium

Reference no: EM133625954

Problem: Coke first decides whether to introduce a New product or Not. Observing this, Pepsi then makes its own decision to introduce a New produce or Not. The payoffs are (20, 30) to Pepsi and Coke, respectively, if they both opt for New. If Coke goes New and Pepsi Not, the payoffs are 60 to Coke and 10 to Pepsi. If Coke opts for Not and Pepsi New, the payoffs are 10 to Coke and 60 to Pepsi. Finally, if they both choose Not the payoffs are 50 each. What is the subgame perfect equilibrium?

Reference no: EM133625954

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