Lecture 7 - Nash Equilibrium: Shopping, Standing and Voting on a Line

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.

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Lecture 7 - Nash Equilibrium: Shopping, Standing and Voting on a Line is an episode from Yale Open Courses ECON 159: Game Theory by William Sheppard.

This episode is 01:11:21 long.

This episode was published on Jun 4, 2018.

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