find how T ∗ depends on the discount rate δ.

Consider a certain duopoly facing repeatedly over time (with no


prespecified end) a fixed demand function for its homogenous good of the form

where ˜ θis an identically and independently distributed random variable in each

time period t. Both firms display a fixed cost function given by

Let ν ≡ pm/pc where pm 0 and pc 0 are the prices prevailing in the (static)

Cournot-Nash equilibrium and the maximally collusive (symmetric) output profile,

respectively. Assume the random variable ˜ θtakes only two values: ˜ θ= 1, ν, each

arising with equal probability. In every period, firms choose their respective outputs

simultaneously, but they observe only the prevailing prices (i.e., they do not observe

the individual outputs chosen by other firms).

Model the situation as an infinitely repeated game with stage payoffs (profits)

being discounted at a common rate δ ∈ (01). Suppose firms wish to sustain the

maximally collusive profile (qmqm) through an equilibrium of the dichotomous

sort presented in Subsection 9.1.2 (i.e., an equilibrium that responds to “normal” and

“regressive” situations). Compute the optimal duration ∗ of the regressive phases

that achieve this objective. Furthermore, find how ∗ depends on the discount rate δ.

find the cost of your paper

what is the average customer time in the system?

The Bijou Theater in Hermosa Beach, California, shows vintage movies. Customers arrive at the theater line at the rate of 100 per hour. The ticket seller averages 30 seconds per….

Which of the following characteristics helps an entrepreneur suc

Which of the following characteristics helps an entrepreneur succeed?      Maintenance of the status quo      B. Tolerance of ambiguity and uncertainty     C. Encouragement of centralization    D. Risk aversion   7. In Kohlberg's model of cognitive moral development,….

follow the instructions in the attached file

Kindly follow the instructions in the attached file 1 Attachment EDCE 660VIRTUALFIELDEXPERIENCEMULTICULTURALJOURNALENTRYINSTRUCTIONSYou will complete the Multicultural Checklist in Chapter 8 of the Erford text as noted in therubric. You do….