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

Simulation for structural equation modeling, I want to simulate observed va...

I want to simulate observed variables for structural equation modeling. In real data it is assumed that observed variables are not error free variables, so should i also simulate e

Probability mass function, how p(x)=hyper geometric distribution is probabi...

how p(x)=hyper geometric distribution is probability mass function

Probability, what is an exclusive probability

what is an exclusive probability

How would you go about choosing a random sample, Q. Suppose a study is bein...

Q. Suppose a study is being done and the population is the American public. How would you go about choosing a random sample population to phone for a survey? Solution: One w

INTRODUCTION TO STASTICS, Let a and b be constants and le yi=axi+b for i=1,...

Let a and b be constants and le yi=axi+b for i=1,2,...n. W HAT IS THE RELATION SHIP BETWEEN mean and variancees of X and Y ?

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

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

Simple random sample, A simple random sample of n = 300 full-time workers i...

A simple random sample of n = 300 full-time workers is selected from a company list containing the names of all n = 5000 full-time workers in order to evaluate job satisfaction. Gi

Give the appropriate choice of the null hypothesis, 1 . Below are the point...

1 . Below are the points scored by the winning team in Week 10 of NFL professional football games this Fall, 2011. 24 17 44 13 21 24 30 20 37 26 17 22 27 37 37 45 a) Use thes

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