Question
Could I please get an explanation for receiving at the correct answer below? Thank you!! Consider two competing firms in a new market, where both
Could I please get an explanation for receiving at the correct answer below? Thank you!!
Consider two competing firms in a new market, where both can choose either a high price or a low price for their product. When both firms set a high price, total demand is split evenly between the two firms. The same happens if both set a low price. However, if one sets a high price and the other a low price, the latter will serve 90% of the market demand. The following are time-discounted values of all future profit streams (in Million CHF). Which of the following answers lists all pure-strategy Nash equilibria?
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