At BVDF you can read "pre-commitment must be irreversible otherwise they are an empty threat. reconsider the example presented at lecture (see the game below where the first number stays for the firm `s B payoffs) and assume that the firm can easily recover the sum spent on the construction of the large plant (i.e. the expenditure is not irreversible). Redraw the game tree and find the resulting equilibrium using backward induction. Copare with the outcome discussed in BVDF and explain why pre-commitments must be irrexersible.

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