contestada

Draw the two-period extensive form game of entry deterrence under the following assumptions:
(1) At the beginning of the first period the incumbent chooses its output level which the (potential) entrant observes.
(2) At the end of the first period the entrant decides whether or not to enter the market, which is observed by the incumbent.
(3) In the second period we have the following situation: If the entrant has not entered the market, then the incumbent sets its output level so as to maximize monopoly profits. If the entrant has entered the market, we have the Cournot model of duopoly, i.e. both the incumbent and entrant choose their output levels simultaneously