Problem
You are considering entering the market for the SmokeRunnerT", an innovative type of running shoe. Dne shoe in each pair has a cigarette holder built in and a long tube that connects to the runner's mouth. This allows one to exercise, while simultaneously enjoying the clean, sweet taste of nicotine. No one is in this market yet, and there is only one other ?rm other than you that could potentially compete. If only one firm enters, it enjoys profits of $100 million per year {needless to say. SmokeRunners'M are likely to he a huge hit}. If both firms enter, each will lose 51D million. A firm that does not enter earns zero {$0} profit. What should you do? If the other firm acts like you do; what will happen? Is there anything that you could do to improve the outcome?