Question: Question 2 Consider a Cournot duopoly operating in a market with inverse demand p(Q) = a - Q, where Q = q1 + q2 is

 Question 2 Consider a Cournot duopoly operating in a market with

Question 2 Consider a Cournot duopoly operating in a market with inverse demand p(Q) = a - Q, where Q = q1 + q2 is the aggregate quantity on the market. Demand is high (a = 8) with probability 1/2 and low (a = 4) with probability 1/2. Firm 1 knows whether demand is high or low, but firm 2 does not. Both firms have production costs of zero, so profits are simply equal to revenues. All this is common knowledge. The two firms simultaneously choose quantities. What is a Bayesian Nash equilibrium of this game

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