fewfif

• i = 1, 2
• i : yi 2 [0, 1) yi i
•

⇡i (yi , yj ) = P (yi + yj )yi C(yi )

price as a function
 (y1⇤ , y2⇤ )

⇡i (yi⇤ , yj⇤ ) ⇡i (yi , yj⇤ )

yi 2 [0, 1) i 6= j i, j = 1, 2
 P (Y ) = 120 20Y

Lowfirm nish
inverse demand P y 120 203
In
4 6
now
88 88
no to

Fiji ftp.iff
120206
df
I 1

P (Y ) = a bY C(yi ) = cyi i = 1, 2
a baa 25
 N

P yj
Y i = j6=i i
i

yi = (a bY i c)/2b

y ⇤ = [a b(N 1)y ⇤ c]/2b

a c
y⇤ = b(N +1)
N (a c) a N
Y⇤ = b(N +1) P⇤ = N +1 + N +1 c
N

N
 Ci (yi ) = ci yi i

maxyi [a bY i byi ]yi c i yi

a ci by3 i
yi = , i = 1, 2
2b
a+c2 2c1 a+c1 2c2
y1⇤ = 3b , y2⇤ = 3b
N N
 i

[a bY ⇤i 2byi⇤ ] ci = 0

P⇤ ci = byi⇤

⇤
P ci bY
= s⇤i ⇤
P P
 ⇤
P ci ⇤ bY
= si ⇤
P P
P
⌘(P ) = bY (P )

P⇤ c ⇤
⇤
= s i /⌘
P
si

X ⇤
P 2
P ci i si
si =
i
P⇤ ⌘
P 2
i si
• i = 1, 2
• i pi 2 [0, 1)
• i
8
>
<(pi ci )D(pi ) pi < pj
⇡i (pi , pj ) = (pi ci )D(pi )/2 pi = pj
>
:
0 pi >= pj
 (p⇤1 , p⇤2 )

⇡i (p⇤i , p⇤j ) ⇡i (pi , p⇤j ) setting

both firm
pi 2 [0, 1) i 6= j i, j = 1, 2
their me a price
p 1 = p2 = c
c1 < c2 < pM (c1 )

p1 = c 2 .01 p2 = c 2
Q = 6000 60P

$10
 P = $10 5400
2400

P = $60

QW = 5000 60PW
max⇡Pw = (5000 60PW )(PW 10)

5000 60Pw 60(Pw 10)

@⇡(60)
$60 @Pw = 2800
$60