Derive the pure strategy nash equilibrium, Basic Statistics

Assignment Help:

There are two firms competing in quantity. Firm 1 and 2 set their quantities supplied, q1 and q2, respectively. The production costs are zero. The market price is given by

1314_Derive the pure strategy Nash equilibrium.png

where a ∈ (0,1/2) and b ≥0. Note that the inverse demand function is kinked at the point (1 - a, a).

69_Derive the pure strategy Nash equilibrium1.png

This is a simple one-shot game. The firms simultaneously set their quantities. The objective of each firm is to maximize its profit, that is,

150_Derive the pure strategy Nash equilibrium2.png

1. Derive the pure strategy Nash equilibrium and the equilibrium profits when b = 0.

Ans. 0.5 each

2. Derive the pure strategy Nash equilibrium and the equilibrium profits when b > 0. Note that two pure strategy Nash equilibria may exist.

Ans. All or nothing

3. Dose an increase in b benefit the two firms? This means that you should explain whether or not at increase in the demand size benefits the firm.


Related Discussions:- Derive the pure strategy nash equilibrium

Rejection of null hypothesis - testing of hypothesis, Two researchers test ...

Two researchers test the same hypothesis. Researcher A rejects the null hypothesis and researcher B fails to reject the null hypothesis.  Discuss three reasons that could cause the

Calculate index number, TIME SERIES ANALYSIS: 1) Discuss the various m...

TIME SERIES ANALYSIS: 1) Discuss the various models of Time series. 2) What are the various methods of trend analysis? What are their implications in the business world?

Find the invariant probability, Problem 1 . Let X 0 ;X 1 ;X 2 . . . be a Ma...

Problem 1 . Let X 0 ;X 1 ;X 2 . . . be a Markov chain with state space f1; 2g and transition probabilities given as follows: p 11 = 0:3; p 12 = 0:7; p 21 = 0:5; p 22 = 0:5:

Generate samples for each distribution, Generate 1000 samples for each of t...

Generate 1000 samples for each of the following continuous random variables: (a). Exponential distribution with λ = 1.2 and λ = 2.1 (b). Normal distribution with μ = 3.1, σ

Probablity, a fair die is thrown 3 times. Let X1,X2,X3 denote the results o...

a fair die is thrown 3 times. Let X1,X2,X3 denote the results of 3 throws. What is the probablity that p[X1>X2+X3]

Histogram and Historigram, What are the differences between Histogram and H...

What are the differences between Histogram and Historigram, list out the points.

Poisson distribution, uuuuioooooo zAZ az; z;;ZuazA; Zazx A Za zA ZA xza XZ ...

uuuuioooooo zAZ az; z;;ZuazA; Zazx A Za zA ZA xza XZ Axz AZX A xA XZ axz AZX A zxA ZXa oxz aOX AxzAAX axz

Type of correlation, Which type of correlation would be appropriate to calc...

Which type of correlation would be appropriate to calculate for the each of the following sets of data? A.   Correlating gender and year in college (freshman, sophomore, junior,

Researching People:Patterns and Trends., Hi I have done my report based on ...

Hi I have done my report based on SPSS data but need a help for deeper analyzing and correcting this what I have already done. Would you be able to help me and if so how much would

Balance sheet, how to write and assignment on the balance sheet?

how to write and assignment on the balance sheet?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd