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Cournot’s model of oligopoly - page 33 / 38

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Another Nash equilibrium

(v1, 0, . . . , 0) is also a Nash equilibrium: Outcome: player 1 obtains the object at price 0; her payoff is

v 1 a n d e v e r y o t h e r p l a y e r s p a y o ff i s z e r o Reason: .

  • Player 1:

    • any change in her bid has no effect on the outcome

  • Players 2, . . . , n:

    • if she raises her bid to x v1 she still loses

    • if she raises her bid above v1 she wins, but gets a negative payoff vi v1.

33

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