Games with sequential moves:rollback equilibrium, Game Theory

 Rollback shows that Boeing chooses peace over war if Airbus enters, so Airbus will enter. Rollback equilibrium entails Airbus playing “Enter” and Boeing playing “Peace if entry”; each firm earns $300 million profit in equilibrium.

 

 

1606_Games with Sequential Moves Rollback equilibrium.jpg

 

 

Posted Date: 9/27/2012 3:09:23 AM | Location : United States







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