📅 2024-09-10 — Session: Nash Equilibrium and Collusion Analysis
🕒 00:00–00:15
🏷️ Labels: Nash Equilibrium, Collusion, Game Theory, Economics, Profit Calculation
📂 Project: Business
⭐ Priority: MEDIUM
Session Goal
The session aimed to analyze the Nash equilibrium and collusion scenarios between two firms, focusing on quantities, profits, and critical discount factors.
Key Activities
- Computed Nash equilibrium quantities and profits for two firms.
- Analyzed collusive output and profits, identifying issues with zero collusive quantities.
- Developed Python code to calculate Nash equilibrium using SymPy, tracking intermediate variables.
- Evaluated inconsistencies in collusive profits and suggested recalculating profit-sharing and discount factors.
- Analyzed collusive profit calculation for Firm B, highlighting negative outcomes due to high marginal costs.
- Suggested revisiting collusion setup for asymmetric output shares.
Achievements
- Gained insights into Nash equilibrium and collusive behaviors.
- Identified critical areas for recalculating and improving profit-sharing strategies.
Pending Tasks
- Recalculate profit-sharing and discount factors to address inconsistencies.
- Explore asymmetric output shares to enhance profitability for both firms.