Cournot duopoly game. There are two firms each with cost zero. Each firm chooses its output. The demand function is p(q) = 1 - qı – q2. Because the price is negative for q; > 1, we may take the strategy set of each player to be Aj =[0, 1]. The Nash equilibrium strategy profile is (а) (3, 3) (b) No Nash equilibrium (с) (1/2, 1/2) (d) (1/3, 1/3)

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Cournot duopoly game. There are two firms each with cost zero. Each firm chooses its output. The
demand function is p(q) = 1- q1 - q2. Because the price is negative for q; > 1, we may take the
strategy set of each player to be Ai -[0, 1]. The Nash equilibrium strategy profile is
(а) (3, 3)
(b) No Nash equilibrium
(c) (1/2, 1/2)
(d) (1/3, 1/3)
Transcribed Image Text:Cournot duopoly game. There are two firms each with cost zero. Each firm chooses its output. The demand function is p(q) = 1- q1 - q2. Because the price is negative for q; > 1, we may take the strategy set of each player to be Ai -[0, 1]. The Nash equilibrium strategy profile is (а) (3, 3) (b) No Nash equilibrium (c) (1/2, 1/2) (d) (1/3, 1/3)
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