ABSTRACT
This chapters models a policy decision that has implications on the actions of two companies in a duopoly modelled as a normal form game. The goal is to understand what financial incentives can be put in place to ensure competition between the companies that benefits the consumer.
A theoretic overview of the definition of normal form games and Nash equilibria is given.
The solution offered in Python makes use of Nashpy which is a specific library for the computation of Nash equilibria. The solution offered in R makes use of Recon which is a general purpose library with functionality for a few topics in economics.
