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game theory problem Consider the following game between two firms, i E {1, 2}: . Each firm announces a price, i.e. firm i announces price

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game theory problem

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Consider the following game between two firms, i E {1, 2}: . Each firm announces a price, i.e. firm i announces price Pi . If pi 0. Find the unique pure strategy equilibrium (and show that it is one), and solve for the payoffs of each rm. (Hint: the reasoning that gives you this equilibrium Will be helpful for the next two parts) . Suppose 01(q) : k1 -q and 62(q) : k2 ' q, With 0

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