OligopolyandGameTheory分析.pptVIP

Nash Equilibrium Dominant strategies: _ Texaco: Drill Two Wells _ Exxon: Drill Two Wells Nash Equilibrium (self-interest): _Texaco: Drill Two Wells _ Exxon: Drill Two Wells Best Outcome (cooperation): _ Texaco: Drill One Well _ Exxon: Drill One Well Game Example: Where to Advertise? Players: C or W Decisions: NBA and NHL No Nash equilibrium in pure strategies Where to advertise? No Nash Equilibrium Dominant strategies: _ W: none _ C: none Nash Equilibrium (self-interest): _ W: none _ C: none Game Example: Evening News Players: ATV and TVB Decisions: 7:30 pm or 8:00 pm Evening News: Nash Equilibrium Dominant strategies: _ ATV: none _ TVB: none Two Nash Equilibria (self-interest): _ ATV: 7:30pm TVB: 8:00pm or _ ATV: 8:00pm TVB: 7:30pm Why People Sometimes Cooperate Firms that care about future profits will cooperate in repeated games rather than cheating in a single game to achieve a one-time gain. * 8 Two on-line e-commerce providers planning advertising strategy -- advertise in NBA (basketball) or NHL (hockey) series? W plan to use comparative advertising -- more effective when viewers see advertisements of both competitors; C using unique advertising -- more effective on separate channel. Draw arrows: no Nash equilibrium in pure strategies: in some games in strategic form, there may be no Nash equilibrium in pure strategies * Prime time for news is 8:0pm; second best is 7:30pm; since audience is limited, get maximum viewership if two channels schedule at different times. Question: which station gets 8:0pm? Situation has elements of coordination -- avoiding same time slot competition -- getting the 8:0pm slot Oligopoly and Game Theory ETP Economics 101 Imperfect Competition Imperfect competition refers to those market structures that fall between perfect competition and pure monopoly. Imperfect competition includes industries in which firms have competitors but do n