Question: BAT (British American Tobacco) is thinking of entering a market to sell cigarettes currently dominated by PM (Phillip Morris). PM knows about this and can choose to either be passive and give up market share, or be tough and try to prevent BAT from gaining any market share. BAT knows that PM can do this and then must make a decision of whether to fight back, enter the market but act passively, or just stay out entirely. Here is the tree:
