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game theory game theory game theory game theory game theory game theory 2. (15) Suppose that three firms compete sequentially (Stackelberg): First firm 1 picks

game theory game theory game theory game theory game theory game theory

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2. (15) Suppose that three firms compete sequentially (Stackelberg): First firm 1 picks q1, then firm 2 observes q and picks q2, then firm 3 observes q1 and q2 and picks q3. Price is determined by the inverse demand function P (@) = 20 - q1 - 92 - 93. Firms face a marginal cost of 4. (a) Solve for the subgame perfect Nash equilibrium. (15)

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