repeatedgames_Presentation - Announcements Repeated Games...

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1 Repeated Games 2 Cornel University Announcements CSG input due Friday at 4 Coke/Pepsi case next Tuesday PS #3 review next Thursday 3 Cornel University Dynamic vs. Static Models Dynamic models can capture aspects of real world competition that the static models cannot It is possible to incur short term costs that are more than offset by long term benefits - not captured in static models It is also possible to see short term profits followed by long term negative effects - not captured in static models 4 Cornel University Cournot and Bertrand Models “Single Shot” Cournot and Bertrand models are static models Look at one time reaction to rival’s move rather than all future opportunities and future behavior of the rival
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2 5 Cornel University Dynamic Model Scenarios Static models cannot explain how firms can maintain prices above competitive levels, i.e., the single-shot Nash equilibrium, without formal collusion Dynamic models are useful in exploring
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This note was uploaded on 02/20/2009 for the course AEM 4240 taught by Professor Blalock,g. during the Fall '07 term at Cornell University (Engineering School).

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repeatedgames_Presentation - Announcements Repeated Games...

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