Consider a repeated version of the Cournot model discussed in class, with two firms i = 1, 2, demandfunctionP (Q) = (A − Q)+ ,marginal production production costs ci > 0 (satisfying c1, c2 < A) and discount factor ↵ 2 (0, 1).a) Find out a strategy profile that induced these firms to cooperate in this market (i.e., to collude byproducing in total the monopoly quantity Ab) Now suppose firms want to sustain cooperation in an asymmetric way. Describe a strategy profile thatinduces these firms to cooperate, for large enough discount factor ‘, in an asymmetric way, i.e., to producethe monopoly quantity in total (which maximizes total profits in the stage game) with firm 1 producingshare ↵1 2 (0, 1) of this quantity and firm 2 producing share ↵2 2 (0, 1) of this quantity, with ↵1 + ↵2 = 1.Suppose that ↵1 < ↵2. Find how large the discount factor ‘ needs to be for cooperation to be sustained(Hint: you can use modified grim-trigger strategies for this question).
Do You Need A Similar Assignment Done For You From Scratch? We Have Qualified Writers To Help You. We Assure You An A+ Quality Paper That Is Free From Plagiarism. Order Now For An Amazing Discount!
Very professional support! Highly recommended.
Researched complicated topic and delivered report by the requested deadline. The paper is of a high standard reflecting careful research and clear assessments. I recommend iLecturers.com.com
It’s a 5 start for me. Excellent research and writing. The paper reflects a careful assessment of scientific information.
With Gib’s reflection, they wrote a really specific essay. Very well written, containing all of the languages I required and excellent references. The writer follows my instructions and writes clearly in English.
I am so grateful and I am 100% happy with your work.
A fantastic piece of work 👏. The writer demonstrated full knowledge of the topic and applying the relevant provided material. Well done.