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While taking Industrial Organization I remember working with: Strategies and games: theory and practice by Dutta Introduction to industrial organization by Cabral Industrial organization: theory and applications by Shy Industrial Organization: Markets and Strategies by Belleflamme and Peitz The first two are rather introductory while third and forth are ...


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One interpretation I can offer. The demand function can be expressed as: $$Q_1 = Q_1(p_1,p_2)$$ Let us take the total differential: $$dQ_1 = \frac{\partial Q_1(p_1,p_2)}{\partial p_1}dp_1+\frac{\partial Q_1(p_1,p_2)}{\partial p_2}dp_2$$ Assume that $Q_1$ remains unchanged with respect to a change in prices. This implies that $dQ_1=0$. Solving the ...


3

I would recommend the The theory of Industrial Organization and the Game Theory from Jean Tirole


3

Your conjecture seems to be contradicted, at least for small values of $\sigma$. You can draw the function with the following R-code: qq_f = function(x,k,h,sig){ -pnorm(-k, sd=sig)*( (dnorm(h*(1-x), sd=sig))^2 ) - 0.5*dnorm(-k^2, sd=sig)*( 2*pnorm(h*(1-x), sd=sig) -1 )^2 } curve(qq_f(x,k=0,h=1,sig=0.5),col='blue',xlim=c(-1,3),type='l',main="A ...


1

Data on employment usually comes out a month or two (sometimes a year) after the reference period. The Bureau of Labor Statistics (https://www.bls.gov/) puts out data on employment (who is working right now) but to see the effects of our current crisis will take time to show. Here are some links to the employment data that the BLS produces: National ...


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It is a market where firms compete for the marginal consumer. It’s an opposite of having fully separated market where two firms do not compete for marginal customer. An example of covered market would be market for bus rides where the departures are scheduled at the exactly same time - so there is competition for the marginal customer. Example of ...


1

The article Quality of Information and Oligopolistic Price Discrimination by Liu and Serfes covers this topic in great detail. It also has a rather nice literature review.


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Both of them are consistent. The economic profit is the total revenue $TR$ minus total cost $TC$ but in economics costs must include also opportunity costs not just accounting ones. However, for all standard market structures $TR>TC$ happens only if the marginal revenue or price $P$ is above marginal costs $MC$. Also if there is positive economic ...


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For a slightly different perspective and somewhat newer tools, I would suggest "Oligopoly Pricing: Old Ideas and New Tools" by Xavier Vives.


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Just looking at the setup, everything is symmetric. This means that if they were to move simultaneously then we should have $p_1 = p_2$, and the payoffs for the two firms the same. According to your calculation, $(p^*_1,p^*_2)=(\frac{a}{2},\frac{a}{4})$. Since $Q_1 = Q_2 \Rightarrow \pi_1 > \pi_2$. So it's quite clear that in this case, the first mover ...


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The problem formulation admits the following Normal Form representation. We can reject any strategy involving price greater than 2, as demand falls to zero and such strategies are strictly dominated by those for which prices are either 1 or 2. 0 1 2 0 [0,0] [0,0] [0,0] 1 [0,0] [0.5,0.5] [1,0] 2 [0,0] [0,1] [1,1]...


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You are right that you first have to find F3's best-response function. F1 and F2 take as given this reaction of F3 to whatever they produce. Hence, you plug this best-response function into the incumbents' profit maximization problem. In that way, you take care of the fact that the incumbents anticipate F3's reaction, indirectly determining $q_3$. You ...


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Start with the second stage, this is just Cournot competition between firm 2 and firm 3. You can solve this for the Nash equilibrium by setting the first order condition for firm 2 and firm 3 and solving these two equations, taking $q_1$ as given. This will give you quantities $q_2$ and $q_3$ in terms of $q_1$ which you can then plug into the profit function ...


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