ECON 1050 Chapter 15: Economics-1 (1) (dragged) 7
17 Sep 2016
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The nash equilibrium is that both firms cheat. The quantity and price are those of a competitive market, and firms make zero economic profit. Other oligopoly games include advertising and research and development (r&d) games. For example, and r&d game in the market for tissues. Anti-viral kleenex and puffs plus lotion weren"t developed because kimberly-clark (kleenex) and p&g (puffs) were thinking about helping you cope with a miserable cold. These tissues and other innovations in the quality of facial tissues are the product of a costly. An economic game of chicken can arise when r&d creates a new technology that cannot be patented. Both firms can benefit from the r&d of either firm.
