lecture24full - Types of games 1 2 Static games of complete...

Info icon This preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
Types of games 1 Static games of complete information (Nash equilibrium) 2 Dynamic games of complete information (Subgame perfect equilibrium) 3 Static games of incomplete information (Bayesian Nash equilibrium) 4 Dynamic games of incomplete information (Perfect Bayesian equilibrium)
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Nash Equilibrium Nash Equilibrium: each player’s strategy is a best response to the strategies of the other players
Image of page 2
Subgame Perfect Nash Equilibrium An equilibrium is subgame perfect if a Nash equilibrium is played in every subgame
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Duopolies 1 Compete on prices (Bertrand) Firms simultaneously choose price, lowest price captures all the demand Low cost producer chooses price just below high cost producer’s marginal cost Sequential Bertrand: lots of SPNE when high cost producer chooses first 2 Compete on quantities Firms simultaneously choose quantities (Cornout), choice of both quantities affect the price Derived choice of x 1 as a function of the choice of x 2 (best response function)
Image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern