Question: Please answer d and e parts, thanks Augmented Competition: Consider two firms playing a two-stage game with discount factor 8. In the first stage they

 Please answer d and e parts, thanks Augmented Competition: Consider two

Please answer d and e parts, thanks

firms playing a two-stage game with discount factor 8. In the first

Augmented Competition: Consider two firms playing a two-stage game with discount factor 8. In the first stage they play a Cournot quantity-setting game in which each firm has costs c; (q;) = 10q; for i e {1, 2} and the demand is given by p(q) = 100 - q, where q = q1 + 92. In the second stage, after the results of the Cournot game are observed, the firms play the following standard- setting game: Player 2 a b A 100, 100 0, 0 Player 1 B 0, 0 300, 300 a. Find the unique Nash equilibrium of the first-stage game and the two pure-strategy Nash equilibria of the second-stage game. b. As far as the two firms are considered, what are the symmetric Pareto- optimal outcomes of each stage-game? c. For which values of & can the Pareto-optimal outcomes be supported as a subgame-perfect equilibrium? d. Assume that 8 = 0.5. What is the "best" symmetric subgame-perfect equilibrium that the players can support? e. What happens to the best symmetric subgame-perfect equilibrium that the players can support as & drops toward zero

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