Duopoly once more .


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Duopoly once more. Here we take a gander at the Stackelberg pioneer/supporter model. The Cournot model was a concurrent diversion as in every player did not comprehend what the other did before their own activity.
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Slide 1

Duopoly again Here we take a gander at the Stackelberg pioneer/adherent model

Slide 2

The Cournot model was a concurrent amusement as in every player did not recognize what the other did before their own activity. The Stackelberg duopoly model is consecutive in that one player will act, the other will see the activity and afterward act. For instance, how about we utilize an indistinguishable request and cost conditions from we utilized as a part of the Cournot illustration: P = 100 – 2Q, or = 100 - 2(q 1 + q 2 ), and MC = 10 for both. Firm 1 is the pioneer in the illustration. There are businesses where we have pioneers. In autos it is still most likely GM. Shouldn\'t something be said about in programming? PC Chips?

Slide 3

Firm 1 being the pioneer imagines that with the market request firm 2 will take what ever some portion of the market firm 1 deserts. In the feeling of Cournot, firm 1 comprehends that firm 2 has a best reaction work demonstrating what firm 2 ought to make. As before in the Cournot case, the best reaction work firm 2 has is found by: MR = MC for firm 2, giving 100 - 2q 1 - 4q 2 = 10, or q 2 = (90/4) - (2/4)q 1 , Firm 1 then conceives that since firm 2 will follow along these lines I (firm 1) will place this into the request and see what is my best alternative where MR = MC.

Slide 4

P = 100 - 2q 2 - 2q 1 , is market request P = 100 – 2[ (90/4) - (2/4)q 1 ]-2q 1 , by sub. of q 2 from firm 2, = 55 - q 1 . Firm 1 MR = MC is then MR = 55 – 2q 1 = 10 = MC, or q 1 = 22.5. At that point the devotee will have q 2 = (90/4) - (2/4)22.5 = 11.25. Add up to yield in the market is 33.75 and in this manner the market cost is (from the request bend) 100 – 2(33.75) = 32.5.

Slide 5

Summary: P Q profit Monopoly 55 22.5 1012.5 P. Comp 10 45 0 for each firm Duopoly - Cournot 40 30 450 for each firm Doupoly – Stack. 32.5 33.75 506.25 for pioneer 253.13 for foller So, the Stackelberg Duopoly stands out nearer to the focused arrangement than did the Cournot arrangement. This appears to be unexpected in light of the fact that for the most part, when we have one pioneer firm, the pioneer gets reprimanded. Be that as it may, here it prompts to better outcome, shy of rivalry.

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