Imagine two vendors (our players) who must simultaneously choose a location to position their displays. There are n possible locations that form a straight line. Further, there is one customer at each location, and customers will choose the closest vendor (and split their time at each vendor if they're equally distanced from both). The profit for each vendor equals the number of customers they attract. Using iterated elimination of dominated strategies (IEDS), what is the dominant strategy equilibrium? Explain. 2.

Imagine two vendors (our players) who must simultaneously choose a location to position their displays. There are n possible locations that form a straight line. Further, there is one customer at each location, and customers will choose the closest vendor (and split their time at each vendor if they're equally distanced from both). The profit for each vendor equals the number of customers they attract. Using iterated elimination of dominated strategies (IEDS), what is the dominant strategy equilibrium? Explain. 2.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter15: Oligopoly And Strategic Behavior

Section: Chapter Questions

Problem 17P

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