📅 2024-09-10 — Session: Analyzed Nash Equilibrium and Collusion in Firms
🕒 00:00–00:15
🏷️ Labels: Nash Equilibrium, Collusion, Game Theory, Python, Profit Calculation
📂 Project: Business
⭐ Priority: MEDIUM
Session Goal
The session aimed to analyze Nash equilibrium and collusive behavior between two firms using game theory principles, with a focus on calculating quantities, profits, and critical discount factors.
Key Activities
- Computed Nash equilibrium quantities and profits for two firms, identifying issues with collusive output being zero.
- Developed Python code to calculate Nash equilibrium using SymPy, including tracking intermediate variables.
- Analyzed collusive behavior and profits using Python, focusing on critical discount factors.
- Evaluated inconsistencies in collusive profits and suggested recalculations for profit-sharing and discount factors.
- Analyzed collusive profit calculation for Firm B, noting negative profits due to high marginal costs, and suggested revisiting the collusion setup for asymmetric output shares.
Achievements
- Successfully calculated Nash equilibrium quantities and profits.
- Developed and executed Python code for Nash equilibrium and collusion analysis.
- Identified and highlighted inconsistencies in collusive profits and critical discount factors.
Pending Tasks
- Recalculate profit-sharing and discount factors to address identified inconsistencies.
- Revisit collusion setup to allow for asymmetric output shares to improve firm profitability.