Game Theory (ECON 159)
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 enter the 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.
00:00 - Chapter 1. Bertrand Duopoly: Standard Model
28:18 - Chapter 2. Bertrand Duopoly: Product Differentiation
40:13 - Chapter 3. Perfect Competition Revisited: The Candidate Voter Model
Complete course materials are available at the Yale Online website: online.yale.edu
This course was recorded in Fall 2007.
Tagged under: Bertrand,Competition,response,Cournot,competition,differentiated,products,Game,Theory,monopoly,perfect,Strategic,behavior,voting,game
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