Scenario 13.17
Consider the entry-deterrence game below. The potential entrant would have to spend some amount in sunk costs to enter the market.
-In the game in Scenario 13.17, who moves first?
A) Potential Entrant
B) Incumbent Monopoly
C) It's a sequential game; firms alternate moving first.
D) Both players move simultaneously.
E) Who moves first is decided by the equilibrium.

Question

Scenario 13.17
Consider the entry-deterrence game below. The potential entrant would have to spend some amount in sunk costs to enter the market. 
-In the game in Scenario 13.17, who moves first?
A) Potential Entrant 
B) Incumbent Monopoly 
C) It's a sequential game; firms alternate moving first. 
D) Both players move simultaneously. 
E) Who moves first is decided by the equilibrium.

Quizplus · Accepted Answer

The potential entrant moves first in this game as indicated by the tree diagram.

Scenario 13.17 Consider the Entry-Deterrence Game Below. the Potential Entrant Would Have