PS12a(09)

PS12a(09) - ECN 712 Fall 2009 Professor Schlee Problem Set...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ECN 712 Fall 2009 Professor Schlee Problem Set XIIa, not to be turned in 1. Evaluate : In a finitely repeated prisoners dilemma, the strategy of defect in every period, no matter what the history is dominant for each player. 2. Prove that in a repeated prisoners dilemma with finite horizon T , the unique Nash equilibrium outcome is DDDD DD | {z } 2 T times (that is, DD chosen T times, the number of times the stage game is played). 3. Strategic Learning-by-Doing . Consider the following two-period duopoly game. The firms produce identical goods with market inverse demand of p ( ) at each date, with p ( q ) < 0 whenever p ( q ) > and p (0) > 0. At date 1, firm 1 is a monopolist. At date 2, firms 1 and 2 play a Cournot game, after observing the date-1 output of firm 1, x . Firm 2 produces at a constant unit cost of k (0 ,p (0)). Firm 1 produces at a constant unit cost of k at date 1 and of c ( x ) at date 2, where c ( ) is strictly decreasing and convex. Firm 2s profit in the Cournot game is 2 ( q 1 ,q 2 ) and firm 1s profit from the two dates (in date 2 dollars) is 1 ( q 1 ,q 2 ,x ). Finally, let R 1 ( q 2 ,x...
View Full Document

Page1 / 2

PS12a(09) - ECN 712 Fall 2009 Professor Schlee Problem Set...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online