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  3. 5 consider a version of the cournot duopoly game where...

Question: 5 consider a version of the cournot duopoly game where...

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5. Consider a version of the Cournot duopoly game, where firms 1 and 2 simul taneously and independently select quantities to produce in a market. The quantity selected by firm i is denoted q, and must be greater than or equal to zero, for i -1,2. The market price is given by p - 100 - 2q Suppose that each firm produces at a cost of 20 per unit. Further, assume that each firms payoff is defined as its profit. (If you completed Exercise 5 of Chapter 3, then you have already dealt with this type of game.) Suppose that player 1 has the belief that player 2 is equally likely to select each of the quantities 6, 11, and 13. What is player 1s expected payoff of choosing a quantity of 14? 241-2q 2.

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