b. Which of your answers in

(a) might change if firm 2 is very impatient while firm 1 can afford to be patient?

c. Let Y B

represent the overall gain in profit when the alternative to a deal is Bertrand competition, let Y C

represent the same when the alternative is Cournot competition, and let Y S

represent the same when the alternative is Stackelberg competition. Which is biggest? Which is smallest?

d. Let p M denote monopoly profit, let p C

denote one firm’s Cournot profit, and let p SL and p SF denote the Stackelberg leader and follower profits. In terms of these, what will be the acquisition price under the three bargaining settings if the alternative is Bertrand competition? What about if the alternative is Cournot competition or Stackelberg competition?