Strategic variables are directly related the

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Unformatted text preview: ¡ ¨¨¡ ¨¨ ¡ ¨ ¡ ¨¨ ¡ ¨¨ ¨ ¡ ¨ ¡ ¨¨ ¨ ¡ ¨ ¨ ¡ ¨ ¡ ¡ ¡ ¡ T E 8 – This means if firm 2 chooses a higher price (that is, a higher level of its strategic variable), firm 2’s best response is to choose a higher price. Strategic variables are directly related. • The Differentiated Goods Bertrand game features Strategic Complements: • Reaction functions are upward sloping. M&S 452 — Strat and Org c 2008 Scott Schaefer 9 Museum • Two Nash Equilibria, but no obvious outcome. Rachel Wrigley Scott Wrigley Field Field Museum 10 5 20 5 0 20 0 10 • Recall the Battle of the Sexes game... M&S 452 — Strat and Org c 2008 Scott Schaefer 10 • Outcomes of games are very often different if the players move sequentially, where the second can observe the first’s action before choosing. • The games we have discussed so far in class are simultaneous move games. The players choose their strategies at the same time, and without observing what the other is doing. M&S 452 — Strat and Org c 2008 Scott Schaefer rr r Rachel €€  €€ €€ € (R Payoff, S Payoff) (1...
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This document was uploaded on 02/20/2014.

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