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G. de ned as E na 1 Xic xi Xjc xj xa 1 xb 1 E xj b 1 b6 i xa qA CB qB XB qB xb qB Xic qi Cjc qj Xj cj Xjc qj The pro t maximization functions of the subsidiaries A and B are displayed in the following equations. Substituting 2bA qA qa cA XA bA nA q i The FOC applies also to the competitors in the market A. 2bA qi ci xi Solving for qi we obatain 1 qi bA nA 1 bA qA xi A 6. Ci Xic 2bB qB cB XB bB nB 1 cj Xjc a 1 a6 j bB n B q j 0 qb 2Cb CB nB 1 CB nB Cb whole can be derived in order to compare...
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