3) Cournot Model with Asymmetric Information - Suppose the inverse demand function is P(Q) = 30 – 0.2 x (Qjoe + Qsarah) - Joe has a constant marginal cost of $10, known to both - Joe's expectation about Sarah's constant marginal cost is: 12 with probability 0.6 C2 = {- 8 with probability 0.4 Question 1(a): Solve for the above Cournot-Nash equilibrium with asymmetric information with Sarah as a high cost supplier (C2 = 12 ... unknown to Joe) %3D Question 1(b): Solve for the above Cournot-Nash equilibrium with asymmetric information with Sarah as a low cost supplier (C2 = 8 ... unknown to Joe) Question 1(c): Solve for the above Cournot-Nash equilibrium with complete information with Sarah as a high cost supplier (C2 = 12 ... known to Joe) Question 1(d): Solve for the above Cournot-Nash equilibrium with complete information with Sarah as a low cost supplier (C2 = 8) ... known to Joe) Question 1(e): If Sarah is a low cost supplier, what is the maximum she would be willing to spend to convince Joe of her cost ?

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