Consider the same setting except that firms face a different demand function and that firms set prices
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Consider the same setting except that firms face a different demand function and that firms set prices at stage 3. Let demand be Qi = 1 - pi- dpj with d > 0 so that products are substitutes and d < 1. Characterize the equilibrium of this game. Does firm 2 have an incentive to share its private information?
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Suppose that firm 2 decides to share its information at stage 2 If its costs are high firm 1 knows t...View the full answer
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Related Book For 
Industrial Organization Markets and Strategies
ISBN: 978-1107069978
2nd edition
Authors: Paul Belleflamme, Martin Peitz
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