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FIGURE 12.2 Decision Tree for Choosing a Release Date
In this sequential game, Warner Brothers chooses a release date first at node A. If Warner Brothers chooses a May release date, Disney will choose a December release date at node B; if Warner Brothers chooses December or March, Disney will choose May at nodes C and D, respectively. Unlike the simultaneous game outcome in Table 12.4, the companies reach a single Nash equilibrium at node B. Here, Warner Brothers releases The LEGO Movie 2 in May, and Disney releases Frozen 2 in December.