Question: Consider the sequential game shown below, where Blue White Airline is deciding whether to charge a high price or a low price for their new
Consider the sequential game shown below, where Blue White Airline is deciding whether to charge a high price or a low price for their new flight to Hawaii. Lion Getaways will observe this action and decide whether they want to Compete by offering their own flight to Hawaii, or Not Compete and continue to offer their existing vacation flights.
Use backwards induction to solve for the outcome of the above game. Blue White Airline charges a Select Low Price", "High Price" and Lion Getaways chooses to Select Not Compete", "Compete"
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