... that A will turn down any offer giving her lessthan $79, so B must offer $80 to A, leaving $10 for B. At the first stage, A knows Bwill turn down any offer giving him less than $10. So A can ... apparentlyirrational behavior. Both types of strategic behavior might deter entry, but fordifferent reasons. While an increase in capacity reduces expected profits byreducing prices, irrational behavior reduces ... function into Defendo’s reaction function and solving forQD:QD = 6 - (0.5)(6 - 0.5QD) = 4.Substituting into Defendo’s reaction function and solving for QO:QO = 6 - (0.5)(4) = 4.Total...