西南民族大学：《中级微观经济学 Intermediate Microeconomics》课程教学资源（PPT课件）Chapter 7 Game Theory and Competitive Strategy

The Nash Equilibrium Revisited ■ Nash equilibrium “I’ m doing the best I can given what you are doing “You’ re doing the best you can given what I am doing. Game Theory 西南民族大学Side21

Game Theory 西南民族大学 Slide 21 The Nash Equilibrium Revisited ◼ Nash Equilibrium ⚫ “I’m doing the best I can given what you are doing” ⚫ “You’re doing the best you can given what I am doing

The Nash Equilibrium Revisited Product choice problem Examples With A Nash Equilibrium Two cereal companies o Market for one producer of crispy cereal Market for one producer of sweet cereal o Each firm only has the resources to introduce one cereal △ Noncooperative Game Theory 西南民族大学Side22

Game Theory 西南民族大学 Slide 22 ◼ Examples With A Nash Equilibrium ⚫ Two cereal companies ⚫ Market for one producer of crispy cereal ⚫ Market for one producer of sweet cereal ⚫ Each firm only has the resources to introduce one cereal ⚫ Noncooperative The Nash Equilibrium Revisited Product Choice Problem

Product Choice problem Firm 2 Crispy Sweet Crispy 5,-5 10,10 Firm 1 Sweet 10,10 5,-5 Game Theory 西南民族大学Side23

Game Theory 西南民族大学 Slide 23 Product Choice Problem Firm 1 Crispy Sweet Crispy Sweet Firm 2 -5, -5 10, 10 10, 10 -5, -5

Product choice problem ■ Question Firm 2 ● Is there a Crispy Sweet Nash equilibrium crispy -5,-5 10.10 Firm 1 ● If not, Sweet why 10,10 5,“5 ●Ifso,how can it be reache Game Theory 西南民族大学Side24

Game Theory 西南民族大学 Slide 24 Product Choice Problem Firm 1 Crispy Sweet Crispy Sweet Firm 2 -5, -5 10, 10 10, 10 -5, -5 ◼ Question ⚫ Is there a Nash equilibrium ? ⚫ If not, why? ⚫ If so, how can it be reached

Beach location game Scenario Two competitors, y and C, selling soft drinks Beach 200 yards long o Sunbathers are spread evenly along the beach e Price price c o Customer will buy from the closest vendor Game Theory 西南民族大学Side25

Game Theory 西南民族大学 Slide 25 Beach Location Game ◼ Scenario ⚫ Two competitors, Y and C, selling soft drinks ⚫ Beach 200 yards long ⚫ Sunbathers are spread evenly along the beach ⚫ Price Y = Price C ⚫ Customer will buy from the closest vendor