# What payoffs do the players get in this Nash equilibrium?

Consider the Cournot game with two firms simultaneously chossing quantities q1 for Player 1 and q2 Show more Consider the Cournot game with two firms simultaneously chossing quantities q1 for Player 1 and q2 for Player 2 with the the marginal cost is 0 and the price being given by p=3-(q1+q2) so long as this is non-negative. If q1+q2 >3 p=0. In this game the best response function is given by q1=(3-q2)/2 and likewise for Player 2s best response. Here q1q2 <= 3. The Nash equilibrium resulting from an intersection of the best response curves is still q1=q2=1. Show that the following is also a Nash equilibrium: q1=q2=3. What payoffs do the players get in this Nash equilibrium? Suppose this game is played twice. Is it possible for the firms to choose the collusive quantity q1=q2= .75 in the first round as part of a subgame perfect Nash equilibrium? Describe the strategies that make this a SPNE. Show less

## “Get 15% discount on your first 3 orders with us” Use the following coupon FIRST15

Posted in Uncategorized