The pricing game between two firms, which can each set either a low or a high price, is given by the following normal form. 11eb5bc8_eb9d_6664_bcf8_d52aa020d29d_SM2615_00 a. Find the Nash equilibrium or equilibria of the game. b. How would you label the actions to make this a quantity game like Cournot?

Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

Edition 12ISBN: 978-1133189022

Edition 12ISBN: 978-1133189022

Exercise 4

The pricing game between two firms, which can each set either a low or a high price, is given by the following normal form.

a. Find the Nash equilibrium or equilibria of the game.
b. How would you label the actions to make this a quantity game like Cournot?

Explanation

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The Nash equilibria in this case is that...