It studies how bidders behave in different auction formats and how the rules of an auction can influence outcomes such as efficiency (the item going to the person who values it the most) and revenue for the seller.
Posts tagged as “Nash Equilibrium”
It is a "stable" outcome because each player's choice is the best possible response to the choices of the other players.
It is a variant of the famous Iterated Prisoner's Dilemma, and it is used to model and analyze the dynamics of conflict and cooperation, particularly between nations or competing groups.
Imagine a market where only two firms, let's call them Firm 1 and Firm 2, are duking it out for dominance. How do they decide how much to produce, and what will the market look like as a result? This is the core question that the Cournot Duopoly Model, a foundational concept in microeconomics, seeks to answer.
Game Theory models mathematically strategic interactions between competitors, useful for analyzing pricing strategies, market entry, etc.