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PB=1 PB=2 PB=3 PB=4 PA=1 4, 4 8, 2 10, 1 0,0 PA=2 2, 8 6, 6 12, 4 12, 2 PA=3 1, 10 4, 12 8, 8 16, 5 PA=4 0,0 2, 12 5, 16 10, 10 Differentiated-products pricing and firms can punish deviations from coordination by a reversion to the (static) Nash equilibrium PA=1, PB=1 for all remaining periods. How much does each firm earn per period in equilibrium? A. 4 В. 6 C. 8 D. 10

PB=1 PB=2 PB=3 PB=4 PA=1 4, 4 8, 2 10, 1 0,0 PA=2 2, 8 6, 6 12, 4 12, 2 PA=3 1, 10 4, 12 8, 8 16, 5 PA=4 0,0 2, 12 5, 16 10, 10 Differentiated-products pricing and firms can punish deviations from coordination by a reversion to the (static) Nash equilibrium PA=1, PB=1 for all remaining periods. How much does each firm earn per period in equilibrium? A. 4 В. 6 C. 8 D. 10

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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PB=1 PB=2 PB=3 PB=4 PA=1 4, 4 8, 2 10, 1 0,0 PA=2 2, 8 6, 6 12, 4 12, 2 PA=3 1, 10 4, 12 8, 8 16, 5 PA=4 0,0 2, 12 5, 16 10, 10 Differentiated-products pricing Suppose the game is played for 30 periods, the relevant discount factor is 0.75, and firms can punish deviations from coordination by a reversion to the (static) Nash equilibrium PA=1, Pg=1 for all remaining periods. How much does each firm earn per period in equilibrium? А. 4 В. 6 C. 8 D. 10
Transcribed Image Text:PB=1 PB=2 PB=3 PB=4 PA=1 4, 4 8, 2 10, 1 0,0 PA=2 2, 8 6, 6 12, 4 12, 2 PA=3 1, 10 4, 12 8, 8 16, 5 PA=4 0,0 2, 12 5, 16 10, 10 Differentiated-products pricing Suppose the game is played for 30 periods, the relevant discount factor is 0.75, and firms can punish deviations from coordination by a reversion to the (static) Nash equilibrium PA=1, Pg=1 for all remaining periods. How much does each firm earn per period in equilibrium? А. 4 В. 6 C. 8 D. 10
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