Would the firms write a contract that specifies a 3 if not, Management Theories

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Would the firms write a contract that specifies a 3 if not

Consider the model of advertising and Cournot competition analyzed in this chapter. Suppose the two firms could write an externally enforced contract that specifies an advertising level a and a monetary transfer m from firm 2 to firm 1. Would the firms write a contract that specifies a = 3? If not, to what level of advertising would they commit?

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