Economics 1st Edition by Dean Karlan,Jonathan Morduch

تمرين 18

Two companies are considering whether to enter a new market. The decision matrix in Figure 9P-8 shows each company's payoff, depending on whether one, both, or neither enter the market. Company A is in Costa Rica. Company B is in Nicaragua.
a. If company A enters, what should company B do?
b. If company B enters, what should company A do?
c. Suppose the Nicaraguan government releases a press statement that it will cover any profit losses for Company B. How much will this policy cost the Nicaraguan government?