-
each of them produces, of an identical product.
-
So as far as the consumers are concerned,
-
these two products are perfect substitutes.
-
You could think of these as two companies producing bottled water
-
and now we're going to get hundreds of letters
-
saying not all bottled waters are the same,
-
especially from Italians and the French,
-
but never mind. Let's just pretend that they are.
-
So just to emphasize that the strategies are quantities,
-
rather than using S let me use Q today to be the strategies.
-
So qi and q-i or q1 and q2 will be the strategies.
-
We need to give a little bit more structure on the payoff