Scenario

Two corporations should simultaneously elect a technology to use for his or her compatible merchandise. If the corporations adopt totally different standards, few sales result. a {standard|a typical} standard ends up in higher sales. One technology is considerably most well-liked by customers over the opposite. Thus, if the businesses will standardize on the well-liked technology, every obtains maximal profits. this can be conjointly referred to as a Pareto coordination game.

Description

There are 2 pure strategy equilibria. each corporations like identical equilibrium that Pareto dominates the opposite. A mixed strategy equilibrium conjointly exists.

Example

		Firm 2
		good	bad
Firm 1	good	5,5	0,0
	bad	0,0	3,3

General Form

		Player 2
		L	R
Player 1	U	a,w	b,x
	D	c,y	d,z

Where the following relations hold:
a>d>b; a>d>c 
w>z>y; w>z>x

 

Posted Date: 7/21/2012 5:02:31 AM | Location : United States

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