3 Coumot Model With Asymmetric Information Suppose The Inverse Demand Function Is P Q 30 0 2 X Qjoe Qsarah J 1 (18.27 KiB) Viewed 28 times
3 Coumot Model With Asymmetric Information Suppose The Inverse Demand Function Is P Q 30 0 2 X Qjoe Qsarah J 2 (18.66 KiB) Viewed 28 times
3) Coumot 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 probabiliy 0.6 C2= 8 with probabiliy 0.4
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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