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)
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)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3ca889a5-39d8-4110-8bb9-fb49ead6739e%2F4e660a20-3b07-46fe-8bf0-db04f0491898%2Fbhy1thl_processed.jpeg&w=3840&q=75)
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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