lecture22full

lecture22full - Recap 1 Duopolies Examined how the Cornout...

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Unformatted text preview: Recap 1 Duopolies Examined how the Cornout game changes when one firm gets to move first (Stackelberg) Found a tangency between first mover's isoprofit curve and second mover's best response function Showed that the amount produced in the Stackelberg game was greater the Cornout game, which in turn was greater than the monopoly quantity 2 Finitely repeated games When there is only one Nash equilibrium to the stage game, the only SPNE to the finitely repeated game is to play the Nash Equilibrium to the stage game in every period, regardless of the history of play When the stage game has multiple NE, other equilibria emerge New SPNE Infinitely repeated games With finitely repeated games, constrained by having to play a NE to the stage game in the last period. With infinitely repeated games, there is no last period. Going to play the stage game forever but discount the future at rate . Another SPNE Collusion in Cornout duopoly Collusion 2 Collusion 3 Static games of incomplete information Possible actions for each player Types of each player (assigned by nature) Probabilities of each player being assigned a particular type Payoffs for each action/type combination Strategies are then plans of action for each player given their possible types Battle of the sexes revisited Bayesian Nash Equilibria Mixed strategies Cornout with Incomplete Information Cornout with Incomplete Information 2 ...
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This note was uploaded on 05/13/2010 for the course ECON 105D taught by Professor Cur during the Fall '09 term at Duke.

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lecture22full - Recap 1 Duopolies Examined how the Cornout...

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