Sequential Cournot Consider the sequential Cournot model in Sect. 1.3.3, but now based on the market price p D 2 3Q (or zero, whichever is larger), where Q is the total quantity produced. (a)...

Sequential Cournot

Consider the sequential Cournot model in Sect. 1.3.3, but now based on the market price p D 2 3Q (or zero, whichever is larger), where Q is the total quantity produced.

(a) Represent this game in extensive form, similar as in Fig. 1.2.

(b) Solve this game by working backwards.

Fig. 1.2