平狄克微观经济学gametheoryandcompetitivestrategy(编辑修改稿)

平狄克微观经济学gametheoryandcompetitivestrategy(编辑修改稿)内容摘要：

Matching Pennies Player A might flip coin playing heads with 189。 probability and tails with 189。 probability If both players follow this strategy, there is a Nash equilibrium – both players will be doing the best they can given what their opponent is doing Although the oute is random, the expected payoff is 0 for each player 169。 2020 Pearson Education, Inc. Chapter 13 42 Mixed Strategy One reason to consider mixed strategies is when there is a game that does not have any Nash equilibriums in pure strategy When allowing for mixed strategies, every game has a Nash equilibrium Mixed strategies are popular for games like poker A firm might not find it reasonable 169。 2020 Pearson Education, Inc. Chapter 13 43 The Battle of the Sexes Jim Wrestling Opera Wrestling Opera Joan 2,1 0,0 1,2 0,0 169。 2020 Pearson Education, Inc. Chapter 13 44 The Battle of the Sexes  Pure Strategy Both watch wrestling Both watch opera  Mixed Strategy Jim chooses wrestling Joan chooses wrestling Jim Wrestling Opera Wrestling Opera Joan 2,1 0,0 1,2 0,0 169。 2020 Pearson Education, Inc. Chapter 13 45 Repeated Games Game in which actions are taken and payoffs are received over and over again Oligopolistic firms play a repeated game With each repetition of the Prisoners’ Dilemma, firms can develop reputations about their behavior and study the behavior of their petitors 169。 2020 Pearson Education, Inc. Chapter 13 46 Pricing Problem Firm 1 Low Price High Price Low Price High Price Firm 2 10, 10 100, 50 50, 50 50, 100 169。 2020 Pearson Education, Inc. Chapter 13 47 Pricing Problem How does a firm find a strategy that would work best on average against all or almost all other strategies? Titfortat strategy Repeated game strategy in which a player responds in kind to an opponent’s previous play, cooperating with cooperative opponents and retaliating against uncooperative ones 169。 2020 Pearson Education, Inc. Chapter 13 48 TitforTat Strategy What if the game is infinitely repeated? Competitors repeatedly set price every month, forever Titfortat strategy is rational  If petitor charges low price and undercuts firm  Will get high profits that month but know I will lower price next month  Both of us will get lower profits if keep undercutting, so not rational to undercut 169。 2020 Pearson Education, Inc. Chapter 13 49 TitforTat Strategy  What if repeated a finite number of times? If both firms are rational, they will charge high prices until the last month After the last month, there is no retaliation possible But in the month before last month, knowing that will charge low price in last month, will charge low price in month before Keep going and see that only rational oute is for both firms to charge low price every month 169。 2020 Pearson Education, Inc. Chapter 13 50 TitforTat Strategy If firms don’t believe their petitors are rational or think perhaps they aren’t, cooperative behavior is a good strategy Most managers don’t know how long they will be peting with their rivals In a repeated game, prisoner’s dilemma can have cooperative oute 169。 2020 Pearson Education, Inc. Chapter 13 51 Repeated Games Conclusion Cooperation is difficult at best since these factors may change in the long run Need a small number of firms Need stable demand and cost conditions This could lead to price wars if don’t have them 169。 2020 Pearson Education, Inc. Chapter 13 52 Oligopolistic Cooperation in the Water Meter Industry Characteristics of the Market Four producers of water meters  Rockwell International  Badger Meter  Neptune Water Meter Company  Hersey Products  Rockwell has about 35% of market share  Badger, Neptune, and Hersey bined have about a 50 to 55% share 169。 2020 Pearson Education, Inc. Chapter 13 53 Oligopolistic Cooperation in the Water Meter Industry Most buyers are municipal water utilities Very inelastic demand Not a significant part of the budget for providing water Demand is stable Demand grows steadily with population Utilities have longstanding relationships with suppliers Reluctant to switch 169。 2020 Pearson Education, Inc. Chapter 13 54 Oligopolistic Cooperation in the Water Meter Industry Significant economies of scale Both long term relationship and economies of scale represent barriers to entry Hard for new firms to enter market If firms were to cooperate, could earn significant monopoly profits If pete aggressively to gain market share, profits will fall to petitive levels 169。 2020 Pearson Education, Inc. Chapter 13 55 Oligopolistic Cooperation in the Water Meter Industry This is a Prisoners’ Dilemma – what should the firms do? Lower price to a petitive level Cooperate Companies have been playing repeated game for decades Cooperation has prevailed given market characteristics 169。 2020 Pearson Education, Inc. Chapter 13 56 Sequential Games Players move in turn, responding to each other’s actions and reactions Ex: Stackelberg model (ch. 12) Responding to a petitor’s ad campaign Entry decisions Responding to regulatory policy 169。 2020 Pearson Education, Inc. Chapter 13 57 Sequential Games Going back to the product choice problem Two new (sweet, crispy) cereals Successful only if each firm produces one cereal Sweet will sell better Both still profitable with only one producer 169。 2020 Pearson Education, Inc. Chapter 13 58 Modified Product Choice Problem If firms both announce their decisions independently and simultaneously, they will both pick sweet cereal and both will lose money What if Firm 1 sped up production and introduced new cereal first? Now there is a sequential game Firm 1 will think about what Firm 2 will do。