ECO100Y5 Lecture Notes - Oligopoly, Places In Harry Potter, Nash Equilibrium
49 views3 pages
sophiapham192 and 37296 others unlocked
53
ECO100Y5 Full Course Notes
Verified Note
53 documents
Document Summary
Game theory-tool for studying strategic behavior, which is behavior that takes into account the expected behavior of others and the mutual recognition of interdependence. Bonnie and clyde rob a bank and get caught. They ditch the loot and the cop has no proof that they did it. They are held in separate rooms and interrogated. Rules- if they confess, they each receive 3 years in jail. If one confesses and one denies, confessor gets 1 year in jail and accomplice gets 10 years. If both deny, both get 2 years in jail for a lesser crime. A payoff matrix shows the outcomes associated with each action for each player. When each player takes the best action given the action of the other player. To find the nash equilibria, underline each players" best response given the action of the other player. An outcome that where each player is playing a best response is a nash equilibrium.
Get access
Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers
Related textbook solutions
Related Documents
Related Questions
1. Characteristics of competitive markets
The model of competitive markets relies on these three core assumptions:
1. | There must be many buyers and sellers a few players can't dominate the market. |
2. | Firms must produce identical products buyers must regard all sellers' products as equivalent. |
3. | Firms and resources must be fully mobile, allowing free entry into and exit from the industry. |
The first two conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking behavior, assume for this problem that a market cannot maintain competition in the long run without free entry.
Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not.
Scenario |
Competitive? |
---|---|
The government has granted the U.S. Postal Service the exclusive right to deliver mail. | ________________ |
Several stores in the mall sell hooded sweatshirts. Each store's sweatshirts reflect the style of that particular store. Additionally, some makers use higher-quality cotton than others, which is reflected in the apparel's prices. | Â |
Two taxi companies serve most of the market in a big city. Consumers don't care about which taxi company they take if they decide it's worth taking a taxi, they flag down the nearest one. | _________________ |
There are dozens of pasta producers that sell pasta to hundreds of Italian restaurants nationwide. The restaurant owners buy from the cheapest pasta producer available to |