Question: Consider a Cournot model where two firms compete with each othere. Each firm i chooses the level of production qi . Each firm has a
Consider a Cournot model where two firms compete with each othere. Each firm i chooses the level of production qi . Each firm has a constant marginal cost c = 10. The market price is determined by the demand function Q = 100 p. (a) We have learnt how to find pure strategy NE in the lecture, show that the Cournot game can be solved by iterated strict dominated strategies and the result coincides with NE. (b) Now suppose there are three firms, find all the pure strategy NE. (c) Now suppose there are n firms, find all the symmetric pure strategy NE. (symmetric NE means in NE each firm chooses the same strategy)
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