Question
- Consider an asymmetric Cournot duopoly game, where the two firms have different costs of production. Firm 1 selects quantity 91 at a pro-
- Consider an asymmetric Cournot duopoly game, where the two firms have different costs of production. Firm 1 selects quantity 91 at a pro- duction cost of 2q. Firm 2 selects quantity 92 and pays the produc- tion cost 4q2. The market price is given by p = 12 91-92. Thus, the payoff functions are u(91, 92) = (12 are u(91, 92) = (12 - 91-92)91-291 and u2(91, 92) = (12-91-92)92 - 492. Calculate the firms' best-response functions BR(92) and BR2(91), and find the Nash equilibrium of this game.
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
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