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Consider a. duopoly with a. Cournot competition. The demand of the market is QIZp. Both rm 1 and rm 2's marginal costs can take two
Consider a. duopoly with a. Cournot competition. The demand of the market is QIZp. Both rm 1 and rm 2's marginal costs can take two values. For rm 1 it can be MC=5/4 with probability 1/3 and MC=3/4 with probability 2/3. For rm 2. it can be MC=5/4 with probability 2/3 and MC=3/4 with probability 1/3. Each rm knows its own MC but does not know the MC of the other rm. (But the probabilities are known to everyone.) What will be he Bayesian equilibrium of the game
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