Industrial Organziation game - Business Strategy & Game theory  Consider a game with competitive for market-share in a large region (a country or city).  Firm 1 initially makes a decision to either compete in the Eastern (E) or Western (W) part of a region, or to opt out entirely (O).  Once this decision has been made, Firm 1 and Firm 2 (who is already present in the region) simultaneously make a decision to be aggressive (A) or passive (P) in the region.  Denote actions in the Eastern region without a prime (i.e. A and P) and those in the Western region with a prime (i.e. A` and P`).   We'll make the following assumptions about these firms -  If Firm 1 opts out, its payoff is 8 and the payoff for Firm 2 is 12  If Firm 1 ENTERS the Eastern region  both firms receive 9 if both are AGGRESSIVE  both firms receive 6 if both are PASSIVE  if one plays AGGRESSIVE and the other plays PASSIVE, the aggresive firm gets 5 and the passive firm gets 2  If Firm 1 ENTERS the Western region  both firms receive 2 if both are AGGRESSIVE  both firms receive 7 if both are PASSIVE  if one plays AGGRESSIVE and the other plays PASSIVE, the aggressive firm gets 10 and the passive firm gets 8  ****** Write out the EXTENSIVE form of this game*****

Industrial Organziation game - Business Strategy & Game theory 

Consider a game with competitive for market-share in a large region (a country or city). 

Firm 1 initially makes a decision to either compete in the Eastern (E) or Western (W) part of a region, or to opt out entirely (O). 

Once this decision has been made, Firm 1 and Firm 2 (who is already present in the region) simultaneously make a decision to be aggressive (A) or passive (P) in the region.  Denote actions in the Eastern region without a prime (i.e. A and P) and those in the Western region with a prime (i.e. A` and P`).  

We'll make the following assumptions about these firms - 

If Firm 1 opts out, its payoff is 8 and the payoff for Firm 2 is 12 

If Firm 1 ENTERS the Eastern region 

• both firms receive 9 if both are AGGRESSIVE 
• both firms receive 6 if both are PASSIVE 
• if one plays AGGRESSIVE and the other plays PASSIVE, the aggresive firm gets 5 and the passive firm gets 2 

If Firm 1 ENTERS the Western region 

• both firms receive 2 if both are AGGRESSIVE 
• both firms receive 7 if both are PASSIVE 
• if one plays AGGRESSIVE and the other plays PASSIVE, the aggressive firm gets 10 and the passive firm gets 8 

****** Write out the EXTENSIVE form of this game*****