Consider a Hotelling location game, where two firms simultaneously choose where to set up their ice cream carts on a one-mile long boardwalk along which customers are uniformly distributed and will walk to the closest ice cream stand. Which of the following is a Nash equilibria of the game? O Firm A locates at 0.25 and firm B locates 0.75. Firm A locates at 0.25 and firm B locates at 1. O Firm A locates at 0.25 and firm B locates at 0.9. Both firms locate at 0.25. None of the above

Consider a Hotelling location game, where two firms simultaneously choose where to set up their ice cream carts on a one-mile long boardwalk along which customers are uniformly distributed and will walk to the closest ice cream stand. Which of the following is a Nash equilibria of the game? O Firm A locates at 0.25 and firm B locates 0.75. Firm A locates at 0.25 and firm B locates at 1. O Firm A locates at 0.25 and firm B locates at 0.9. Both firms locate at 0.25. None of the above

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Consider a Hotelling location game, where two firms simultaneously choose where
to set up their ice cream carts on a one-mile long boardwalk along which customers
are uniformly distributed and will walk to the closest ice cream stand. Which of the
following is a Nash equilibria of the game?
O Firm A locates at 0.25 and firm B locates 0.75.
Firm A locates at 0.25 and firm B locates at 1.
Firm A locates at 0.25 and firm B locates at 0.9.
Both firms locate at 0.25.
None of the above

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