Suppose Firm 2 offered some sort of convincingly binding way of preventing itself from Expand no matter what Firm 1 did, so as to convince Firm 1 that it could safely Stay Out. It's not clear what form such a truly binding agreement might take but for the sake of argument let's suppose a way could be found. This would mean that Firm 1 now faces the game shown to the right. No matter what it does Firm 2 will Stay Out.

   Can Firm 1 be trusted in this case? What is to keep it from Expanding and earning a payoff of 15 rather than 13? Any promise by Firm 1 to Stay Out is now no longer credible.

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