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Pfizer (F) and Moderna (M) are the only two firms producing a vaccine against the virus Omega. The inverse demand for this vaccine is given
Pfizer (F) and Moderna (M) are the only two firms producing a vaccine against the virus Omega. The inverse demand for this vaccine is given by P = 100 20, where the total quantity is the sum of the production of the two firms: 0 = Q, + Q\d. If Pfizer moves first, what would be the Nash equilibrium in this sequential game? (This becomes a "Stackelberg oligopoly" game.) Fill out the needed information in the following extensive form (game tree): strategies, players, and payoffs; and solve by backward induction to find the Nash equilibrium. Compare the profits of Pfizer in this equilibrium with that found in the simultaneous (Cournot) game in (c)! Does Pfizer benefit from moving first (first-mover advantage)?F M e. Now assume that Moderna is the first mover. Draw the respective game tree, and find the Nash equilibrium in this sequential-move game. Is there an evidence of first-mover advantage for Moderna (compare its profits from the Nash equilibrium in the simultaneous game in 'c')
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