Posted by Candice on .
According to the following game tree, and if the entrant and incumbent both only care about their own monetary payoff, what is/are the game's Nash equilibrium?
Entrant - stays out (2,15)
If the entrant enters,
Incumbent - co operates (5,5)
- punishes (-3,9)
So what is the games nash equilibrium/equilibria, and what is the game's subgame perfect nash equilibrium/equlibria?
(I wasn't sure what was the difference too)