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1. Show that the NE of the Cournot game we solved in class on Thursday (the one with the two firms competing in a market)
1. Show that the NE of the Cournot game we solved in class on Thursday (the one with the two firms competing in a market) is the unique profile of strategies surviving IESDS. Do this under the assumption that the demand function is P(Q) = a - b. Q instead of P(Q) = a - Q as we did in class. (The solution is on pages 18-19 in the textbook, you need to understand it. However, notice that b= 1 in the textbook, so you need to adjust the argument for the case of an arbitrary value of b). Can you do that process for the game in section 1.2.B from the textbook? 1. Show that the NE of the Cournot game we solved in class on Thursday (the one with the two firms competing in a market) is the unique profile of strategies surviving IESDS. Do this under the assumption that the demand function is P(Q) = a - b. Q instead of P(Q) = a - Q as we did in class. (The solution is on pages 18-19 in the textbook, you need to understand it. However, notice that b= 1 in the textbook, so you need to adjust the argument for the case of an arbitrary value of b). Can you do that process for the game in section 1.2.B from the textbook
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