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Microeconomics - game theory and oligopoly Problem 4 Oligopoly - Price War Barnes and Nobel and Amazon are the two largest online book retailers in

Microeconomics - game theory and oligopoly

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Problem 4 Oligopoly - Price War Barnes and Nobel and Amazon are the two largest online book retailers in the US. The two companies compete in the online market for 'Harry Potter and the Sorcerer's Stone', a famous book by the English author]. K. Rawling. Both companies can buy copies of the book from Scholastic at $8 per copy and have an additional average cost $1 per copy. Use game theoretical concepts to explain Why, even if the two companies have signicant market power, on most days they both sell the book at $9 per copy

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