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# problemset3 - Problem Set 3 Ben Polak Econ 159a/MGT522a Due...

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Problem Set 3 Ben Polak Econ 159a/MGT522a Due Oct3, 2007 In class, we considered two models of duopoly competition: Cournot (quantity) competition than in quantities, but the Cournot outcome seems more ‘realistic’ than the Bertrand outcome. compete in prices rather than quantities. Unlike the Bertrand model, however, the products of of my solving the model on the board, you will solve it for yourselves. But don’t panic: The problem set will set will walk you through this step by step. Answer all the numbered questions below. The Game . We can think a ‘city’ as a line of length one. { p 1 and p 2 respectively. { c . { Potential customers are evenly distributed along the line, one at each point.

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problemset3 - Problem Set 3 Ben Polak Econ 159a/MGT522a Due...

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