Opgave 3

Find SPNE for følgende spil

a)

Vi ser at:
S1={ L1 L2 , L1 R 1 , R1 R 2 , R1 L2 }S2={ L , R }Spillerne rykker simultant. Derfor kan vi betragter den del
af spillet i den røde firkant som en bi-matrix:
L R
L2 -3, -1 1, -2
R2 -2,1 3,0

Det fremgår at der er en NE: (−2,1).

(-2,1)

Deraf fremgår det, at SPNE bliver: SPNE={L1 R 2 , L}

 b)

(-1,-1)
(1,-1)

Vi ser at:
S1={ L1 L2 , L1 R 1 , R1 R 2 , R1 L2 }S2={ L , R }Spillerne rykker simultant. Derfor kan vi betragter den del
af spillet i den røde firkant som en bi-matrix:
L R
L2 -6, -6 -1, -1
R2 1,-1 -3, -3
Det fremgår da, at der er to ligevægt i bi-matrix.

If the PSNE of the subgame 1 is ( R2 L) the P1 chooses:

SPNE={R1 R 2 , L }If the PSNE of subgame 1 is (L2 R) then P1 chooses:
SPNE={L1 L2 , R } Dvs.:
SPN E a={( R 1 R2 , L ) , ( L1 L2 , R ) }
 c)

Spiller 1’s strategi:

S1= { L1 L2 L2 , L1 L2 R2 , L1 R2 L2 , L1 R2 R2 , R1 L2 L2 , R1 L2 R2 , R1 R 2 L2 , R1 R2 R 2) S2={ L , R }

Bruger baglæns induktion til de to subgames (gule streger). Derefter skal man opstille som matrix:
L R
L1 (2,1) (3,0)
L2 (3,1) (3,-1)
I ovenstående bi-matrix er der en ligevægt.

Da bliver vores SPNE:

SPNE={R1 L2 R2 , L }

D)
 There is no proper subgames.
S1={ L1 L2 , L1 R 2 , R1 L2 , R1 R 2 }S2={ L , R }Opskriver hele spillet som matrix:
P2
L R
L 1 L2 2,1 3,0
P1 L1 R 2 2,1 3,0
R 1 L2 3,1 0,0
R1 R 2 0,0 3,-1

Der er ingen proper subgame. Derfor vil alle nash-ligevægte være SPNE:
SPNE={( R1 L2 , L ) }
Exercise 4:
Gibbons 2.3 (p.131). Suppose the players in Rubinstain’s inifinite-horizon bargaining game have
different discount factorrs: δ 1 for player 1, and δ 2 for player 2. Adapt the argument in the text to
show that in the backwards-induction outcome, player 1 offers the settlement:

to player 2, who accepts.

Der gælder følgende:
- In uneven rounds P1 offers 1−si to P2
- In even rounds P2 offers si to P2
- Rubinstein’s trick: Look at a 3 round game, then generalize (knowing that uneven rounds
are basically the same).
Round 3: (Last round)
P1 offers som 1−s3 ≥ 0, which P2 accepts.
P1 gets s3.

Round 2: (Even round  player 2 turn).

P2 must offer some s2 ≥ δ 1 s 3.
Uses discount factor for player 1.
She offers s2=δ s 3 and P1 accepts.
P2 keeps 1−s 2=1−δ 1 s3

Round 3: (Uneven round  player 1 turn).

P1 must offer 1−s1 ≥ s 2 ( 1−δ 1 s 3 ).
He offers 1−s1 =δ 2 ( 1−δ 1 s 3 ) and P2 accepts.
P1 keeps s1=1−δ 1 ( 1−s 1 s3 ) for himself.

Dvs.
1−s1 =δ 2 ( 1−δ 1 s 3 ) ⟺s1=1−δ 2 ( 1−δ 1 s 3 )Set s1=s3 =s ¿ and solve for s¿:
¿ 1−δ 2 Indsætter i:
s¿ =1−δ 2 ( 1−δ 1 s¿ ) ⟺s¿ −δ 1 δ 2 s ¿=2−δ 2 ⟺ s ( 1−δ 1 δ 2 )=1−δ 2 ⟺ s¿ =
1−δ 1 δ 2
¿ 1−δ 2 ¿ 1−δ 1 δ 2 1−δ 2 Hvilket kan omskrives til:
1−s =1− 1−s = −
1−δ 1 δ 2 1−δ 1 δ 2 1−δ 1 δ 2

Og dermed vist.
Opgave 5

a) Given the levels of research x 1 , x 2 , find the resulting levels of output ¿ and q 2 ( x 1 , x 2 ) ¿in the
second stage.
Two-stage games med to virksomheder.
Opskriver profitten:
π i=( p−c ) q 1−c i ( xi ) Det sidste led er omkostningerne ved R&D.

1. Kigger først på second stage:

Udskriver profitfunktionen:
π i=( 2−q i−q j−( 1−x i−x j ) ) q i−x 2i ¿ ( 1−qi−q j+ x i + x j ) q i−x 2i Finder FOC med hensyn til q i:
∂ πi
=1−2q i−q j + x i + x j=0Løser for q:
∂ qi
1−q j + x i+ x j
=qi Næste skridt er at finde FOC for q j . Fordi der er symmetri, må der gælde:
2
¿
q i=q j=q
Da bliver ligevægten i second stage:
¿
¿ 1−q + x i + x j
q= Omskriver til:
2
¿ 1
q = ( 1+ xi + x j ) Her er vi færdige med stage 2. Ovenstående er best response for mængderne.
3

b) Assume that the stage on decision are made simultaneously and independently. That is, each
firm i chooses x i in order to maximize its own profit (foreseeing the outcome of stage two). Using
your results from (a), find the levels of research and output in the subgame-perfect Nash

equilibrium:

Kigger derefter på first stage

Vi indsætter ovenstående i profitten:
2
π i=( 1−qi −q j+ xi + x j ) q i−x i 

( 1 1
)(
π i= 1− ( 1+ x i + x j ) − ( 1+ xi + x j) + xi + x j
3 3
1
3 ) 2
( 1+ x i + x j ) −x i

( 2
) 1
3
1
3
1
3
1
π i= (1+ x i + x j )− ( 1+ x i+ x j ) ( 1+ x i + x j ) −x2i π i= ( 1+ x i + x j ) ( 1+ x i+ x j )−x 2i π i= ( 1+ x i + x j )2 −x2i
3 9
Finder da FOC:
∂ 2
= ( 1+ x i + x j ) −2 x i=0Pga. symmetri antages x i=x j =x¿ :
∂ xi 9
2 2 4 2 1
( 1+2 x ¿ )−2 x ¿ =0 + x ¿ =2 x¿2+4 x¿ =18 x ¿2=14 x¿ =x ¿ x ¿= Indsætter i:
9 9 9 14 7
1
¿
( 1
q = 1+ +
3 )
1 1
7 7 q=
¿ 3
∗9
7
= =
9 3 Således bliver udfaldet:
21 7
¿ ¿ ¿
{(
¿ 1 1 3 3
)}
( x 1 , x 2 , q1 .q 2 )= 7 , 7 , 7 , 7 c) Assume not that the firms collude at the first stage. That is, they
chose x1 and x2 to maximize their joint profit while taking into account, that q1 and q2 will be
chosen simultaneously and independently at stage two. Find the resulting levels of reasearch
and output.
1 1
π col =π 1 + π 2 π col= ( 1+ x1 + x 2 )2−x 21 + ( 1+ x 1+ x2 )2 −x22 Omskriver:
9 9
2 2 2 2
π col= ( 1+ x1 + x 2 ) −x 1−x 2Bruger symmetri.
9
FOC:
∂ π col 4 2
= ( 1+ x 1 + x 2 )−x 21−x 22=0 x 1= ( 1+ x 2 )Symmetri:
∂ x1 9 7
5 ¿ 2 ¿ 2
x = x = =x 1=x 2Indsætter da og finder de optimale mængder:
¿ ¿
7 7 5
1
q ¿1,2= 1+ + = Dvs.
3 (
2 2 2
5 5 5 )
¿ ¿ ¿ ¿
(
2 2 3 2
( x 1 , x 2 , q1 , q2 )= 5 , 5 , 5 , 5 )
d) Based on your findings in (b) and (c), compare the outcomes in terms of consumer welfare
[hint: it is enough to look at total output] and firms’ profit [hint: no calculations are necessary].
Comment on the source of the difference.
Vi ved at: Q ↑. → . p ↓→ . CW ↑
Firms profit:
Jo tættere vi kommer på monopol  jo højere profit.
Direkte effekt: Q ↑. → . p ↓→ . π ↓(move away¿mon− pricing)
Hvor p ( Q )=2−q1−q2

Strategic effect:
- Internalize the positive externality from research.
- Increase output at lower costs
More beneficial at a higher price.