(D,D) isn't a a NE since either player could profitably deviate to C. (D,C) and (C,D) are NE though, if H > 10, since the "D" player can't profitably deviate since C will reduce their payoff to 10, and C can't profitably deviate since 0 < 2. This looks, instead, like a hawk dove game.
This is a nice thing, I just read Billions and billions by Carl Sagan, and there is a chapter he explains the Tit-for-Tat method, I got really curious to see how this actually works.
can you work on this please Firms A and B serve the same market. They have constant average costs of GHS2. per unit. The firms can choose either a high price (GHS10) or a low price (GHS5) for their output. When both firms set a high price, total demand = 10,000 units which is split evenly between the two firms. When both set a low price, total demand is 18,000, which is again split evenly. If one firm sets a low price and the second a high price, the low-priced firm sells 15,000 units, the high-priced firm only 2,000 units. a. Analyse the pricing decisions of the two firm as a non-cooperative game: i. In the normal from representation, construct the pay-off matrix, where the elements of each cell of the matrix are the two firm profits. ii. Derive the equilibrium set of strategies. iii. Explain why this is an example of the prisoners' dilemma game. b. Analyse the pricing decisions of the two firms as a co-operative game: i. Is the {low, low} outcome a Nash equilibrium if both players play a grim strategy and have a discount factor of 0.65? ii. How may history affect the behaviour of the pricing strategy of the firms in this game?
@Ashley Hodgson Hello Ashely, thank you for your video. I am making a simple formula for a dissertation using prisoner's dilemma. Would you be willing to video chat and review my formula to make sure it makes sense?
Bravo! You made something I was confused with for a very long time really simple (:
Little fix, to discount you divide 10 by 1.05; you found net present value dividing payment by rate of return, two very different things!
thank you Ashley! this is super helpful
(D,D) isn't a a NE since either player could profitably deviate to C. (D,C) and (C,D) are NE though, if H > 10, since the "D" player can't profitably deviate since C will reduce their payoff to 10, and C can't profitably deviate since 0 < 2. This looks, instead, like a hawk dove game.
This is a nice thing, I just read Billions and billions by Carl Sagan, and there is a chapter he explains the Tit-for-Tat method, I got really curious to see how this actually works.
🤣
Thank you for this video
Thank you
was it about infinite sequence?
It is wow my sister it amazing explaination
DEAR ASH can you explian this formula?
can you work on this please
Firms A and B serve the same market. They have constant average costs of GHS2.
per unit. The firms can choose either a high price (GHS10) or a low price (GHS5) for their output. When both firms set a high price, total demand = 10,000 units which is split evenly between the two firms. When both set a low price, total demand is 18,000, which is again split evenly. If one firm sets a low price and the second a high price, the low-priced firm sells 15,000 units, the high-priced firm only 2,000 units.
a. Analyse the pricing decisions of the two firm as a non-cooperative game:
i. In the normal from representation, construct the pay-off matrix, where the elements of each cell of the matrix are the two firm profits.
ii. Derive the equilibrium set of strategies.
iii. Explain why this is an example of the prisoners' dilemma game.
b. Analyse the pricing decisions of the two firms as a co-operative game:
i. Is the {low, low} outcome a Nash equilibrium if both players play a grim strategy and have a discount factor of 0.65?
ii. How may history affect the behaviour of the pricing strategy of the firms in this game?
@Ashley Hodgson Hello Ashely, thank you for your video. I am making a simple formula for a dissertation using prisoner's dilemma. Would you be willing to video chat and review my formula to make sure it makes sense?
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