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Unformatted text preview: PHALL-82241 PINDYCK CHAPTER 13 page 6 of 7 FIGURE 13.1 BEACH LOCATION GAME Ocean
C A 200 yards Beach You (Y) and a competitor (C) plan to sell soft drinks on a beach. If sunbathers are spread evenly across the beach and will
walk to the closest vendor, the two of you will locate next to each other at the center of the beach. This is the only Nash
equilibrium. If your competitor located at point A, you would want to move until you were just to the left, where you could
capture three-fourths of all sales. But your competitor would then want to move back to the center, and you would do the
same. Fig 13-01.EPS PHALL-82241 PINDYCK CHAPTER 13 page 7 of 7 FIGURE 13.2 PRODUCT CHOICE GAME IN EXTENSIVE FORM Crispy Firm 2 Sweet Firm 2 Firm 1 Fig 13-02.EPS Crispy �5, �5 Sweet 10, 20 Crispy 20, 10 Sweet �5, �5 ...
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This note was uploaded on 09/28/2011 for the course ECON 105 taught by Professor Prof.eco during the Spring '11 term at Indian School of Business.
- Spring '11