Two profit-maximising firms, A and B, have to make a decision how much they will produce...
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Two profit-maximising firms, A and B, have to make a decision how much they will produce of a certain product. They can decide to supply an amount of either 25, 50 or 75 units. The game is a one-shot simultaneous-move game. Binding contracts between A and B are not possible. Their profits are presented in the payoff matrix below, which is common knowledge. B Q=25 Q=50 Q=75 Q=25 80, 80 ', 50, 78 40, 76 A Q=50 74, 60 50,48 30, 64 Q=75 74, 40 64, 32 28, 30 Two profit-maximising firms, A and B, have to make a decision how much they will produce of a certain product. They can decide to supply an amount of either 25, 50 or 75 units. The game is a one-shot simultaneous-move game. Binding contracts between A and B are not possible. Their profits are presented in the payoff matrix below, which is common knowledge. B Q=25 Q=50 Q=75 Q=25 80, 80 ', 50, 78 40, 76 A Q=50 74, 60 50,48 30, 64 Q=75 74, 40 64, 32 28, 30
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