Find the bayes nash equilibrium in the game

Reference no: EM13231772

Consider a Cournot model where the market demand is P = a - qA - qB. Both firms have constant average and marginal cost of c. Demand, however, is uncertain: it is high (a = aH) with probability f and low (a = aL) with probability 1 - f. Firm A has done a market study and knows whether demand is high or low, but Firm B does not. The two firms choose quantities simultaneously. Find the Bayes Nash equilibrium in this game.

Reference no: EM13231772

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