Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Applied Statistics Expert

Consider a Cournot duopoly with two firms (fi rm 1 and fi rm 2) operating in a market with linear inverse Demand P(Q) = x Q where Q is the sum of the quantities produced by both rms and x is a parameter that captures the level of demand in this industry. Firms have 0 cost of production. The demand for the good is uncertain: it is high, x = xH, with probability 1/3 and it is low, x = xL (< xH), with probability 2/3. Furthermore, information is asymmetric: rm 1 knows whether demand is high or low but rm 2 does not. All this is common knowledge. The two rms simultaneously choose quantities.

(a) What are the actions, types, beliefs and payo s of both rms?

(b) Suppose that 7xL > xH. Find the Bayesian Nash equilibrium of the game.

(c) Compare the quantities chosen by rms 1 and 2. Interpret the result.

Now, call q1-H and q2-H the quantities chosen by rms 1 and 2 if the demand is high under complete information (that is, when both know it). Also, call q1-L and q2-L  the quantities chosen by rms 1 and 2 if the demand is low under complete information (that is, when both know it).

(d) Find (q1-H ,  q2-H, q1-L , q2-L) Compare these quantities with the quantities determined in the case of incomplete information. Interpret the result

Applied Statistics, Statistics

  • Category:- Applied Statistics
  • Reference No.:- M9528582

Have any Question?


Related Questions in Applied Statistics

Business statistics project assignment -there will be two

BUSINESS STATISTICS PROJECT ASSIGNMENT - There will be two parts to this assignment: Part A: Group Work (A Business Report) Part B: Individual Reflective Piece (A Ministerial Brief) The response to Part A must be provide ...

Business data analysis facts from figures assignment

BUSINESS DATA ANALYSIS: FACTS FROM FIGURES Assignment - Question 1 - Private capital expenditure for 12 successive quarters are presented in the following table: Quarter Millions     1 31,920 2 25,120 3 30,350 4 24,650 5 ...

Applied statistics - regression assignmentin this

Applied Statistics - Regression Assignment In this assignment you are expected to set up a regression equation, run that regression and interpret and evaluate the results. You will need to carefully state all null hypoth ...

Construct a regression model for predicting total charges

Construct a regression model for predicting total charges from length of stay for DRG 105. a. State the null and alternative hypotheses and alpha level. b. Prepare a scatter diagram with the regression line for the two v ...

Assessment task -you become interested in the non-skeletal

Assessment Task - You become interested in the non-skeletal effects of vitamin D and review the literature. On the basis of your reading you find that there is some evidence to suggest that vitamin D deficiency is linked ...

Go to the website of ahrqs website titled advances in

Go to the website of AHRQ's website titled Advances in Patient Safety: From Research to Implementation located in the Webliography and select a specific research article. Bring back to the class, at minimum, the followin ...

Assignment -in this assignment ms excel must be used to

Assignment - In this assignment MS Excel must be used to perform any calculations/graphical presentations as required in this assignment. Question 1 - Below you are given the examination scores of 20 students (data set a ...

Business analytics and statistics research report

Business Analytics and Statistics Research Report Assignment - This assignment is based on fictional data - do not contact the company listed below. You are creating a business report for the CEO of a retail company call ...

Go to the webliography source for the national cancer

Go to the Webliography source for the National Cancer Institute's Surveillance, Epidemiology, and End Results (SEER) Program. In the Fast Stats, create your own cancer statistical report, "Stratified by Data Type," and u ...

Question - go to the website national quality forum nqf

Question - Go to the website, National Quality Forum (NQF), located in the Webliography, and download the article by WIRED FOR QUALITY: The Intersection of Health IT and Healthcare Quality, Number 8, MARCH 2008. You are ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As