Skip to main content

Game theory focuses on decision making involving participants, competitors, or other indiviudals in industries or markets for the best decision makeing, rather than making a decision in isolation. The Nash equilibrium helps economists understand how decisions that are good for the individual can be terrible for the group. Also, every person in a group makes the best decision for herself, based on what she thinks the others will do. And no-one can do better by changing strategy: every member of the group is doing as well as they possibly can. An example I came across in business is with two different companies competing. There is Company A and Company B and both companies want to determine whether they should launch a new advertising campaign for their products. If both companies start advertising, each company will attract 100 new customers. If only one company decides to advertise, it will attract 200 new customers, while the other company will not attract any new customers. If both companies decide not to advertise, none of the companies will engage new customers. Company A should advertise its products because the strategy provides a better payoff than the option of not advertising. The same situation exists for Company B. Thus, the scenario when both companies advertise their products is a Nash equilibrium.
Offer a reverse scenario?

ANSWER
Nash equilibrium is one of the fundamental concept of game theory, discovered by American mathematician John Nash.

Comments

Post a Comment

Popular posts from this blog

Osmosis Data Sheet

Data Sheet: Activity - Osmosis Name Course Date Activity Data Code       Procedure I -Test Solution 1: Water Complete the tablesand questions below using your data and information found under the Background tab Data Table I Note: Difference in Final Volumes = Final Volume of Test Sol - Final Volume of Water Trial Starting Volume of Test Solution (L) Starting Volume of Water (L) Final Volume of Test Solution (L) Final Volume of Water (L) Difference in Final Volumes (L) 1 1.28 1.75 1.51 1.52 -0.01 2 1.28 2.00 1.64 1.64 0 Observations and Questions [1] Given that the final heights (and volumes) are the same for the water and test solution, what can you...
2 comments
Read more
Simple Computer Science Questions Question 2 ANSWER Match the following a - 4 b - 10 c - 8 d - 6 e - 9 f - 1 g - 2 h - 7 i - 3 j - 5
Post a Comment
Read more
Question: 7. A circular cam 200 mm in diameter rotates off centre with an eccentricity of 25 mm and operates the roller follower that is carried by the arm as shown in Fig. 23.35. ???200 mm +100mm- Spring 25 mm Fig. 23.35 The roller follower is held against the cam by means of an extension spring. Assuming that the force between the follower and the cam is approximately 250 N at the low position and 400 N at the high position. If the spring index is 7, find the diameter of wire, outside diameter of spring and the number of active coils. The maximum shear stress may be taken as 280 MPa. Use G 80 kN/mm2 ANSWER
3 comments
Read more