Unformatted text preview: p i = f i ( q i ; q j ) . (c) Find the mixed Nash equilibrium pro&ts when i. Firm one chooses price and &rm two chooses quantity ii. Firm one chooses quantity and &rm two chooses price. Note that since the demand functions are not symmetric, your answer to (ii) will not be the reverse of (i) 2. Re-do question  with & = & 1 . 3. Using the pro&ts calculated in  and , construct the payo/ matrix for the strategic game where the two &rms simultaneously choose between a price or quantity strategy. Determine for each case ( & = 1 ; & = & 1 ) whether there is a dominant strategy 1...
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- Spring '09
- Game Theory, mixed Nash Equilibrium, constant marginal cost, Cournot equilibrium quantities, Bertrand equilibrium prices