07 Nash equilibrium shopping, standing and voting on a line分析和总结分析和总结.docxVIP

Game Theory: Lecture 7 Transcript Overview: We first consider the alternative Bertrand model of imperfect competition between two firms in which the firms set prices rather than setting quantities. Then we consider a richer model in which firms still set prices but in which the goods they produce are not identical. We model the firms as stores that are on either end of a long road or line. Customers live along this line. Then we return to models of strategic politics in which it is voters that are spread along a line. This time, however, we do not allow candidates to choose positions: they can only choose whether or not to enterthe election. We play this candidate-voter game in the class, and we start to analyze both as a lesson about the notion of equilibrium and a lesson about politics. September 26, 2007 back Professor Ben Polak: All right, so last time we started to study imperfect competition. We looked at the Cournot model, but the bigger themeis the study of how firms compete outside of the sort of easy cases that you study in 115: so outside of the example of monopoly, where there is only one firm and so theres not much competition; and outside the case of perfect competition where there are so many firms, its as if each firm is a price taker. Were going tocontinue with that today, and in fact youre going to continue with it on into the homework. So last time, we looked at Cournot. It was the model we started with. We looked at two firmscompeting in quantities. And just to review a little bit what we did last time, the kind of exercise there--so I think, is this right, I think probably went a little fast last time. I was kicking myself afterwards. People can nod or shake their heads. I think I went a bit fast, so Im sorry forthat. If there was a time to go too fast itwas probably last time, because itturns out this is something thats covered well in the textbook, so its covered in chapter six of the textbook. But the kind of exercise we did last time is a us