Macroeconomics Exam Review 5

Macroeconomics Exam Review 5 - 1.75 If a is the best...

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Unformatted text preview: 1.75 If a is the best element in ( , ) for every player , then ( , a ) ( , a ) for every and a for every . Therefore, a is a Nash equilibrium. To show that it is unique, assume that a is another Nash equilibrium. Then for every player ( , a ) ( , a ) for every which implies that a is a maximal element of . To see this, assume not. That is, assume that there exists some such that which implies ( , a ) ( , a ) for every a In particular ( , a ) ( , a ) which contradicts the assumption that a is a Nash equilibrium. Therefore, is a Nash equilibrium....
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This note was uploaded on 01/16/2012 for the course ECO 2024 taught by Professor Dr.dumond during the Fall '10 term at FSU.

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