Calculate the nash equilibrium contributions for each firm

Reference no: EM13235026

Two construction companies are lobbying to obtain a share of work on repaving city streets. The share of the project going to each firm depends on money contributions to the mayor's reelection fund. The project has value V in total. The mayor is somewhat biased in favor of firm 1, which is run by his niece. If firm 1 contributes x1 and firm 2 contributes x2, then the shares of the project going to firms 1 and 2 are s1 and s2, respectively, where
s1(x1,x2) = (2x1)/(2x1 + x2) and s2(x1,x2) = (x2)/(2x1 + x2);
The payoff to firm i is
pi(x1,x2) = si(x1, x2)V - xi, i = 1, 2.
Calculate the Nash equilibrium contributions for each firm if they make contributions simultaneously.

Reference no: EM13235026

Questions Cloud

Find an article that describes a computerized database : Find an article that describes a computerized database system that is in use in the field in which you work

Calculate bobs economic profits at the activity level : Competitive Strategy. Bob Ice owns and operates Bob's Music Center, Ltd., a small firm that offers music lessons in Huntsville, Alabama. Given the large number of competitors and the lack of entry barriers

What is the maximum height the ball goes above the ground : A soccer ball is kicked with an initial horizontal velocity of 18 m/s and an initial vertical velocity of 13 m/s, What is the speed of the ball 0.8 seconds after it was kicked, What is the maximum height the ball goes above the ground

Explain what mass of sodium formate is required : You need to produce a buffer with pH = 4.1 by dissolving a weighed amount of sodium formate (FW = 68.0072) in 500-mL of 0.45-M formic acid

Calculate the nash equilibrium contributions for each firm : Two construction companies are lobbying to obtain a share of work on repaving city streets. The share of the project going to each firm depends on money contributions to the mayor's reelection fund. The project has value V in total.

What is the output from the following c++ code fragment : What is the output from the following C++ code fragment

Explain salt bridge completes the electric circuit : If you are performing a Zinc-Copper Galvanic Cell where Zn is the Anode and Cu is the cathode and you soak the salt bridge with a saturated ammonium nitrate solution, in which direction would the ammonium ions move when the salt bridge completes t..

Find the standard time for the process : On the basis of these observations, find the standard time for the process and they also believe that there will be an 80% learning rate. How many hours of labor should Joe include for his bid?

What is the output from the following c++ code fragment : What is the output from the following C++ code fragment

User Account

All Pages