ECO100Y5 Lecture Notes - Lecture 13: Nash Equilibrium, Normal-Form Game, Petro-Canada
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ECO100Y5 Full Course Notes
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Chapter 12 notes oligopoly and game theory. Oligopoly is a market structure in which a small number of firms compete. Payoff matrix shows the payoffs from every possible combination of strategies. Nash equilibrium when each firm"s strategy is their best response given the strategy chosen by the other firm. Dominant strategy a strategy that is best for a firm regardless of what strategies are employed by other firms. Cooperative equilibrium an equilibrium in which players cooperate to increase their mutual payoff. Non- cooperative equilibrium an equilibrium in which players do not cooperate but pursue their own interest. To find nash equilibria: Suppose coke and pepsi are the only two manufacturers of soda- based drinks in eduland. The payoff matrix for the firms is given below. Touch the region in the matrix that shows the dominant strategy equilibrium. Two friends, jay and adnan, decide to kill one of their ex- girlfriends.
