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[vangace]

Is this assessment of the Nash Equilibrium correct??

I think its wrong, why would Saudi Arabia produce at 12,10 when they can optimize at 20.8

 

[Ned Flanders]

Lets ask the man himself:

"So Mr MVP..what say you??"

 

[vangace]

Lets ask the man himself:

"So Mr MVP..what say you??"

not funny

 

[Mr Gump]

Damn i did this 2 yrs ago and it was bloody easy....now i cant remember wtf to do. I know it has something to do with the optimal position for both resources/products, but fuck my mind is dead.

 

[Johnas]

Is this assessment of the Nash Equilibrium correct??

I think its wrong, why would Saudi Arabia produce at 12,10 when they can optimize at 20.8

Read it this way:

If Saudi Arabia goes High Q, the best thing for Venezuela is to go Low Q (6 is bigger than 4 or 3).
If Saudi Arabia goes Medium Q, the best thing for Venezuela is to go Medium Q (10 is bigger than 7 or 8).
If Saudi Arabia goes Low Q, the best thing for Venezuela is to go Medium Q (18 is bigger than 1 or 15).

Now, if Venezuela goes High Q, the best thing for Saudi Arabia is to go Low Q (8 is bigger than 5 or 6).
If Venezuela goes Medium Q, the best thing for Saudi Arabia is to go Medium Q (12 is bigger than 9 or 10).
If Venezuela goes Low Q, the best thing for Saudi Arabia is to go Medium Q (20 is bigger than 3 or 18).

Since Medium, Medium ends up being chosen twice (more than any other option), this is the Nash Equilibrium. I would explain it in further detail if I could, but I can't find my notes (from last year) and I never needed a textbook for the class, the teacher gave us everything we needed.

 

[vangace]

Read it this way:

If Saudi Arabia goes High Q, the best thing for Venezuela is to go Low Q (6 is bigger than 4 or 3).
If Saudi Arabia goes Medium Q, the best thing for Venezuela is to go Medium Q (10 is bigger than 7 or 8).
If Saudi Arabia goes Low Q, the best thing for Venezuela is to go Medium Q (18 is bigger than 1 or 15).

Now, if Venezuela goes High Q, the best thing for Saudi Arabia is to go Low Q (8 is bigger than 5 or 6).
If Venezuela goes Medium Q, the best thing for Saudi Arabia is to go Medium Q (12 is bigger than 9 or 10).
If Venezuela goes Low Q, the best thing for Saudi Arabia is to go Medium Q (20 is bigger than 3 or 18).

Since Medium, Medium ends up being chosen twice (more than any other option), this is the Nash Equilibrium. I would explain it in further detail if I could, but I can't find my notes (from last year) and I never needed a textbook for the class, the teacher gave us everything we needed.

It does make sense, Venezuela would have to move to medium as you said, 10>8

 

[Yossarian]

I think your key misunderstanding was that both venezuela and Saudi Arabia react in order to optimize their opportunities.

 

[vangace]

I think your key misunderstanding was that both venezuela and Saudi Arabia react in order to optimize their opportunities.

yep, i understand it now. Game theory has been giving me major problems yet its suppose to be one of the easiest chapters of price theory