Reference no: EM133133340
Professors and Students
Again, consider a city with 100 professors and 100 students and two neighborhoods (A and B). There are 100 lots in each city so the number of professors and students in each cities must add up to 100.
A professor's indirect utility for living in a neighborhood is given by:
ViP(LSi, LPi , ri)= 1.7 (LSi -LPi) - ri
Where LSi and LPi are the number of students and professors living in neighborhood i, respectively.
A student's indirect utility for living in a neighborhood is given by:
ViS(LSi, LPi , ri)= 1.5 (LSi -LPi) - ri
What are all of the equilibrium point(s)? List the equilibria in terms of the number of students in neighborhood A.
Also, for each of the equilibria listed, state whether it is stable or unstable.