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    Argosy University/ Phoniex University/
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    Phoniex University
    Oct-2001 - Nov-2016

Category > Management Posted 09 Jul 2017 My Price 11.00

versions of the Cournot duopoly model

1.5.       Consider the following two finite versions of the Cournot duopoly model. First, suppose each  firm  must  choose  either half  the monopoly quantity, qm/ 2 = (a - c)/4, or the Cournot equilib­ rium quantity, qc = (a - c)/3. No other  quantities  are  feasible. Show that this two-action game is equivalent to the Prisoners' Dilemma: each firm has  a  strictly  dominated  strategy,  and  both are worse off in equilibrium than they  would  be  if  they  cooper­ ated. Second, suppose each  firm  can choose  either  qm / 2, or qc,  or a third quantity, q'. Find a value for q' such that the game is equivalent to the Cournot model in Section 1.2.A, in the sense that (qc, qc) is a unique Nash equilibrium  and both  firms are worse off  in equilibrium than they could be if  they  cooperated, but  neither firm  has  a  strictly  dominated strategy.

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Status NEW Posted 09 Jul 2017 05:07 PM My Price 11.00

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