hw310 - 14.12 Game Theory Prof Muhamet Yildiz Fall 2010...

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14.12 Game Theory Prof. Muhamet Yildiz Fall 2010 Homework 3 Due on 1028/2007 (in class) Youneedtoshowyourworkina l lquest ions . 1. Find a subgame-perfect equilibrium of the following game: 2. Consider the following two-stage Cournot competition. There are symmetric f rms. In the f rst stage, simultaneously, each f rm decides whether to enter the market (by building a factory) or stay out of it. If a f rm stays out of the market, it simply gets the payo f of 0. If a f rm enters, it incurs a f xed cost where (1  2 1) .Inth e second stage, after observing which f rms entered, simultaneously, each f rm in the market selects a quantity w ithzerocostandse l lsitatpr ice =1 ,where is the sum of the quantities selected. (Note that if a f rm enters the market and sells units at price
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This note was uploaded on 10/31/2011 for the course 18 18.445 taught by Professor Liewang during the Spring '11 term at MIT.

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hw310 - 14.12 Game Theory Prof Muhamet Yildiz Fall 2010...

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