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*2 Hcq if it s margin al c os t is hi gh, or )(*2 Lcq if it s margin al c os t i s lo w . ? Thi s ca n b e writt en as ( *1q, ( )(*2 Hcq, )(*2 Lcq)) ? One i s the be st res pon se to th e o ther ? A Nas h e qui li bri um so lu tion c al le d Ba ye si an Nas h eq ui li bri um . June 19, 2021 73347 Game TheoryLecture 22 19 Summary ? What is a static game of inplete information? ? Prisoners’ dilemma of inplete information ? Cournot duopoly model of inplete information ? Next time ? More examples ? Bayesian Nash equilibrium ? Reading lists ? Chapter of Gibbons 。s qua nti ty is )(2 Lcq is ??1 . So it so lv es 0 ..]))(([)1( ]))(([ 1211211???????????qtsccqqaqccqqaqM a xLH?? June 19, 2021 73347 Game TheoryLecture 22 16 Cournot duopoly model of inplete information cont’d ? Fi rm 139。s best r espo nse to 1q, if it s m argin al cost is lo w . June 19, 2021 73347 Game TheoryLecture 22 15 Cournot duopoly model of inplete information cont’d ? Fi rm 1 k nows exac tly its co st fun ctio n 111 )( cqqC ?. ? Fi rm 1 do es no t k now e xactl y firm 239。s b es t re sp onse to 1q, if its m arg in al c os t is hi gh. June 19, 2021 73347 Game TheoryLecture 22 14 Cournot duopoly model of inplete information cont’d Firm 2 know s exactly i ts mar gin al cost is high or lo w . ? If its m argi nal cost is lo w , . 222 )( qcqC L?, th en , for any gi ven 1q, it wi ll solve 0 ..])([ 2212????qtscqqaqM a xL ? FOC: )(21)( 021221 LLLcqacqcqqa ???????? ? )(2 Lcq is firm 239。s qua nti ty is )(2 Hcq is ? , an d th e probab il ity tha t fi rm